Emerging Property Market Downturn Accelerates Except in China
The property market in China is showing more resilience while India has been hard hit by the global economic downturn, according to the recently released RICS Global Commercial Property Survey. Most of the Chinese indicators remain in positive territory, with both supply and demand holding up and expectations generally upbeat. Fourteen percent more Chartered Surveyors expect an increase in floor space to be let and sold throughout China in the coming months, while 18% more Surveyors are reporting a rise in capital values.
On the other hand, India has experienced a significant commercial property downturn in Q3 2008. Rising interest rates, higher inflation, and a continuing lack of liquidity is impacting significantly on business confidence. Forty-five percent more Chartered Surveyors reported a fall in occupier demand compared to just 6% in the last quarter. The balance of surveyors reporting investor purchases plummeted from a flat zero balance to -73.
RICS Chief Economist Simon Rubinsohn said, "The 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. Large 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.
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