quick take
- Since the 2008 Global Financial Crisis (GFC), the zero interest rate policy along with quantitative easing has been the norm for the past 15 years.
- This policy has contributed to asset inflation, which is expected to reverse. However, the extent of this reversal remains unclear.
- Both the equity and real estate sectors thrive in an environment where credit is cheap. But with Treasury yields now above 5% at the start of the yield curve, the incentives are shifting.
- Dylan LeclairThe Bitcoin magazine analyst handed out a graph showing that the current 3-month US Treasury yield is roughly equal to the S&P index yield and the US corporate bond yield (below).
- As yields on government bonds are globally perceived as ‘risk-free’ rates, holding other assets is becoming less attractive, especially when they yield around 5%.
- Furthermore, the average rental yield for UK property is 5-7%. Not only is this below consumer price index (CPI) inflation, but it is also becoming less attractive as yields are starting to rise above 5%, making it potentially a more attractive investment option. be.
| region | area | Gross rental yield |
|---|---|---|
| east midlands | Nottingham city | 6.49% |
| Boston area | 6.01% | |
| Mansfield area | 6.00% | |
| eastern england | fenland district | 5.60% |
| city of peterborough | 5.49% | |
| Great Yarmouth District | 4.56% | |
| London | barking and dagenham | 5.12% |
| Newham | 4.87 | |
| Bexley | 4.80% | |
| northeast | Hartlepool | 7.64% |
| middlesbrough | 7.61% | |
| Sunderland | 7.61% | |
| northwest | Burnley | 7.92% |
| liverpool | 7.02% | |
| Hydeburn | 6.98% | |
| southeast | City of Portsmouth | 5.60% |
| gosport district | 5.54% | |
| city of southampton | 5.54% | |
| Southwest | city of plymouth | 5.64% |
| gloucester district | 5.45% | |
| Swindon | 5.40% | |
| wales | brynau gwent | 7.02% |
| Mercer Tafle | 6.54% | |
| Rhonda Cynon Tough | 6.44% | |
| west midlands | stoke-on-trent city | 6.63% |
| coventry district | 6.04% | |
| Newcastle-under-Lyme District | 5.98% | |
| yorkshire and hamburger | north east lincolnshire | 6.72% |
| Barnsley District | 6.45% | |
| City of Kingston Upon Hull | 6.42% |
Source: Zoopla
The ongoing major repricing event in the TradFi market first appeared on CryptoSlate.
