Recent data published by Investment Property Databank, the worlds’ leading authority on analyzing the performance of all commercial property markets, has revealed that property prices have again started to fall. They have also issued a clear warning saying “investors should remain vigilant of any risks within their property portfolios”.

Prices are forecast to fall even further in the near future as the supply of property being sold is expected to rise. This supply will mainly come from banks, which have started to take harder positions with property owners who are in arrears with their loan interest payments, in the form of repossessions. Since there is limited demand to meet this supply, as banks are still refusing to lend money to property investors, prices will suffer.

This view can be supported by derivative pricing which is showing that values of shops, offices and industrial units will fall in 2011 and 2012 and there will be limited movements in 2013 and 2014.

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