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08/12/2008
Commercial property slump will run until 2011, Rics says |
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The Royal Institution of Chartered Surveyors (Rics) has claimed that the commercial property sector is only half way through the slump.
Valuations of commercial property capital may fall by another 25 per cent over the next two years, which would equate to a decline of around 50 per cent from the market's peak in the middle of last year, Rics said.
Commercial property values have fallen by 24 per cent since June 2007, the Investment Property Databank has revealed.
Commenting, Rics senior economist Oliver Gilmartin said: "We are only half way through the price correction in the commercial property market with values set to fall through 2009 and 2010 as rental declines gather pace."
However, Mr Gilmartin added that transaction activity is set to rise as more sellers look to accept lower offers for properties.
The institution claimed that the sector could see the downturn begin to reverse in 2011, when the cutting of interest rates and the recovery of the global market take effect.
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