Savills: ‘The market is passing peak uncertainty’

Most markets appear to be either at, or past, the moment of peak uncertainty, Savills claims.

A trading update from the agency and property brand said while “challenging macro conditions” are expected to continue for some time, sentiment is now turning towards reductions in the cost of capital being likely during 2024.  

Savills said it made cost reductions during 2023 and highlighted that its less transactional service lines continued to provide a resilient earnings stream, with the group's consultancy and property management businesses performing well.

It expects to perform in line with analyst forecasts of pre-tax profits between £85m and £97.1m.

Focusing on the residential market, the update said: “As anticipated a year ago, residential markets outside London were more subdued as volumes reverted to more normal levels of activity after the abnormal conditions during and post-pandemic. Indeed, our UK business overall delivered a very strong performance in difficult market conditions.   

“Our European and North American businesses, being the most exposed to transactional service lines, felt the greatest impact of prolonged uncertain market conditions, resulting in trading losses for the year. In contrast the strength and diversity of our Asia Pacific business enabled the group to withstand significant reductions in activity, particularly in both Australia and Greater China, to post a profit, albeit reduced year on year.”