I have been researching reports from a number of commercial property professionals, in the hope of finding out how the commercial property market is expected to fare in 2011.
Collectively the reports show a varied view of the property market in 2011, with some predicting falls in property prices and other predicting an upturn. There is persistent uncertainty in the market.
The global property markets will depend on economic recovery and individual government’s actions to pick up the economy and property markets.
The performance of any commercial market will depend on employment rates in that area or country. In the UK the retail property market will also be affected by the rise in VAT.
Another factor that will impact on the market will be the accessibility of finance and whether or not banks will begin to lend again in 2011. Lending limitations have remained tight since the commencement of the financial crisis.
There are contradictory opinions on Asian markets, with some remaining optimistic about the future and others predicting a slowdown. The Jones Lang LaSalle report states: ‘In Asia Pacific, strong economic conditions and business confidence will boost office take-up in 2011.’
Emerging markets are likely to perform better than established ones, as the bulk of established markets are still recuperating from the impact of the global financial crisis. Although it is worth noting that emerging markets carry a higher risk for investors.
Most of the reports were optimistic on commercial and residential Central London markets; one cause for this could be the 2012 Olympics and the commercial boost which will be provided in the lead up to the games.
As with any other forecasts or predictions, there are no certainties and no-one can be sure of what the year will bring for the global property markets.
I suppose though…in the long term – say the next ten years, property values are sure to go up. When the banks finally start lending money instead of giving it to themselves in the form of bonuses, then the times of milk and money will come again.
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