Markets: W&P forecasts falling rents
Wüest & Partner is forecasting an end to price increases in the residential market, while achievable rents for office, retail and commercial space are likely to remain under pressure. These are the findings of the Immo-Monitoring 2016 published by the consultancy firm.
After years in which residential markets dried up in many places, market liquidity in the residential segment has increased significantly, observes Wüest & Partner. For the time being, structural overcapacity is not to be expected, but the prolonged phase of price increases is likely to come to an end.
For 2016, Wüest & Partner expects rents for apartments on offer to fall slightly rather than rise for the first time since the turn of the millennium (minus 0.3 percent). The stagnation in rental apartment prices already set in during the second half of 2015 and is expected to continue next year.
For single-family homes, the researchers expect a slight price increase of 0.4 percent, while prices in the condominium segment are expected to decline by 0.6 percent.
Commercial space market under pressure
According to Wüest & Partner, achievable rents for office, retail and commercial space will remain under pressure. According to the forecast, rents for office space in 2016 will fall by 2.2 percent, and rents for retail space by as much as 3.2 percent.
Overall, supply in the commercial market did not expand any further in the second quarter of 2015; however, surges in demand that could have absorbed the vacant space failed to materialize in many places. Smaller and more flexibly usable spaces are more in demand than ever in the commercial space market. (ah)
