Property investing in volatile economies delivers outsized returns to investors who manage macroeconomic, currency, regulatory, and climate risks systematically. Our analysis identifies five persistent risk clusters (macroeconomic & inflation, currency/convertibility, political/regulatory, operational/physical, and capital-market/liquidity) and provides a practical approach that blends portfolio design, deal structuring, operational resilience, and insurance.

We illustrate with recent, real-world examples from Argentina (inflation & rent law shocks), Turkey (currency & policy shocks), and Nigeria (cost inflation, FX stress) to show how tools such as indexed leases, local/foreign-currency hedges, political-risk guarantees, and climate-resilient due diligence materially reduce downside.
Why volatility matters for property investors?

Cash-flow erosion through inflation and price controls. Rapid inflation can wipe out nominal rent contracts if not indexed or renegotiated; regulatory interventions (rent controls) may further compress income. Argentina’s recent experience showed extreme inflation and policy shifts that made nominal rents and landlord returns highly volatile. Currency/convertibility risk. When local currency collapses, dollar-linked liabilities or foreign investors’ repatriation plans are threatened — creating refinancing and exit risk. Multilateral insurers exist to cover some of these exposures. Policy and political risk: Rapid policy reversals, contract breaches can depress valuations and block cash exits. Recent political and stabilisation shocks (e.g., Turkey’s policy reversals and market response) reveal how political contagion affects real estate fundamentals. Supply-chain & cost inflation: Construction material and labour inflation change the feasibility of development projects, increasing capex and completion risk.