In a year-end earnings meeting last Wednesday, BGC Partners CEO and board chairman Howard Lutnick said that the resilience of U.S. real estate markets is such that they won’t be affected either by economic slumps or by Federal Reserve interest rate hikes.
“Raising rates another quarter- or half-percent [this year] will not impact the overall real estate market. We think the fundamentals of the real estate business are good,” Lutnick stated in the meeting, as quoted by The Real Deal.
Lutnick also cited the strength of leading brokerages like Newmark Grubb Knight Frank as a major factor in the country’s economic stability, especially since their focus on the domestic market does not leave them vulnerable to a global economic downturn.
This is in contrast with other firms that are highly dependent on the health of other economies.
“Many of our publicly-traded peers have huge exposure to Asia, which is dramatically difficult for them,” Lutnick said.
“And if you were going to bet on anyone, you’d bet on U.S. real estate with low interest rates – and that’s why you’re seeing us outperform, generally,” Lutnick added.
Earlier this week, Federal Reserve chair Janet Yellen addressed concerns of uncertainty in foreign economies (especially China) by stating that the central bank might make changes to its initial plans of multiple interest rate hikes in 2016.
Despite the series of oil price crashes worldwide and various signs of possible slowdown, the United States would be pretty much insulated from the effects of global economic volatility, according to a financial institution’s chairperson.