After a brief improvement in performance in the global market for commercial properties it has deteriorated again in the second quarter of the year, according to a new study by the Royal Institution of licensed appraisers of property (RICS)
Respondents are now more cautious in terms of the lease and investments, having in mind the new turmoil in the euro area and the decrease in the economic growth.
More obvious is the negative mood in the investment market, which reports a significant increase in the number of countries which predict a decrease in capital values and investment bargains. European countries continue to be best representatives in this group, such as France, Greece, Italy and the Netherlands report weakest results.
Singapore also reported a continuing decrease in both -activity and price expectations. This is despite the fact that available investment capitals have recorded their first increase for the year.
At the other end of the scale is Canada, which continues to avoid the negative trend, as well as some developed countries like Japan, Germany and USA.
The change in sentiment of the rental market in the second quarter is less noticeable, but it follows a similar pattern. The list of the countries with the worst results in terms of demand and expectations for rental levels is almost identical. Europe is once again a major part and Germany again and makes an exception.
Canada is the market with the best expectations for rental growth, although they are slightly lower compared to the first three months of the year. Thailand, Russia, China and Hong Kong also seem to have relatively stable property market right now, and the recovery in the U.S. also continues.
A modest growth is expected in Brazil comparing to the first quarter, marking the fact that the sharp decrease in the economy led to imbalance in the market, where supplying is outstripping the demand. Deterioration on the basis of the first quarter can be seen in India.
The number of countries expecting growth in the distressed property market has made significant changes during the quarter.It is expected that European countries like Greece, Ireland and Italy are the markets in which this trend will be most visible.
"Recurrence of euro crisis with generally weak economic data, obviously adversely affects a large part of the property market, despite the ongoing sustainability of the market in countries such as Canada, China and Thailand ," commented Simon Rabinsan, Senior Economist in RICS.
An encouraging factor is the recent action of central banks in China, Brazil and Europe, although it is likely to require more incentives to make sure that the economy will be able to resist the increasingly turbulent environment, he said.