Real estate is by no means a perfect hedge against inflationary pressures. But over the long term, rents and property values do tend to rise alongside other prices, giving real estate returns a positive correlation with inflation.
Rising prices are now a global concern. And when inflation rears up, there are few places for investors to hide. Real estate could provide a partial hedge. Particularly at a time when there is great uncertainty, not only about inflation and growth but also about geopolitics, Covid-19 and more.
In times of economic turbulence, people have tended to turn to real assets — including bricks and mortar — as tangible stores of value. A similar logic applies when inflation is spiralling higher.
