There has been an over-compensation in the adjustment of prices for
Speaking at today’s Birmingham Economic Seminar, David Allen, director at Atisreal and chairman for the Investment Property Forum (
“There has been an overcompensation in the adjustment of prices, which has presented a good opportunity for some buyers.
“We cannot really be sure how far values have fallen – IPD figures say 15% but it could be as far as 20%. Until buyers come back to the market, we will not know the new pricing levels accurately.”
Allen said he believed the city’s investment market will pick up from April onwards.
“There’s still prime stock that may come to the market and some buyers waiting for the right opportunity to come back in. With the wealth of opportunistic funds being set up on top of the Sovereign Wealth funds, coupled with the increased activity of overseas buyers, such as private Irish investors, now that yields have moved out, there is plenty of reason to be optimistic in the
Institutional buyers will return to the market in the second half of 2008, added Allen, with the expectation of positive returns in 2009. “These funds/buyers will still make funds available to invest in property,” he said.
Although the credit crunch was an accelerant or a catalyst for the slowdown, Allen believed it was already happening.
“Due to the slowdown there is much clearer recognition of the difference between prime and secondary properties. The secondary market will take longer to pick up. Investors will continue to seek quality – prime stock will be sought after for long-term returns,” he said.
Meanwhile, the occupational market remains relatively buoyant apart from shopping centres where there is a large amount of space in the pipeline.
