RICS research shows India and Eastern Europe hard hit, with China the only major market holding up
The property market in India and Eastern Europe has been hit hard by the global economic crisis but China is holding up well, according to RICS research.
In its global commercial property survey, out today, the body said that rising interest rates, higher inflation and a continuing lack of liquidity have severely knocked Indian business confidence in the third quarter of 2008.
The balance of chartered surveyors reporting a fall rather than a rise in occupier demand rose to 45%, compared with 6% in the previous quarter, it said. The balance of surveyors reporting a fall rather than rise in investor purchases shot up to 73%, from a level balance previously.
In emerging Europe, which includes Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Russia, Slovakia, Turkey and Ukraine, 46% more surveyors reported a fall in capital values than a rise. Russia was the hardest hit country in the region.
China's commercial property market showed more resilience. Expectations were generally “upbeat”, according to the report. Fourteen per cent more surveyors said they expected an increase rather than a decrease in floor space to be let and sold throughout China in the coming months, while 18% more reported a rise in capital values.
Meanwhile in the US, the proportion of surveyors reporting a fall rather than a rise in pipeline developments jumped from 48% to 79%.
Simon Rubinsohn, RICS chief economist, said: °8The worsening economic climate is taking its toll on the commercial property markets in most parts of the world and the credit crunch has now extended its grip into emerging markets.
°8Large interest rate cuts by central banks should eventually provide some support. However, with liquidity still tight and tenant demand softening further pressure on the commercial sector is inevitable in the near term.”