London, Nov.21 : It is interesting to note how countries across the world have been performing in this temporary phase of global slowdown. Asia, which has comparatively been a little less 'harmed' than the Western world, has had its share of impact and is still trying to cope with it.
The two giant economies of the Asia -- India and China -- have been distinctly impacted by the slowdown.
A Royal Institution of Chartered Surveyors (RICS) Global Commercial Property Survey released today has revealed that the property market in India has been hit hard by the global economic downturn, and warns that the emerging property market downturn is accelerating.
RICS holds the world's leading qualification when it comes to professional recognition in land, property and construction.
The survey has stated that India 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 per cent in the last quarter. The balance of surveyors reporting investor purchases plummeted from a flat zero balance to -73.
According to Simon Rubinsohn, the RICS chief economist, 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," said Simon Rubinsohn.
But, ineterestingly, China is showing more resilience with its commercial property in China remaining firm. Commercial property in China has, to date, remained relatively Firm in the face of a global economic downturn.
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 per cent more surveyors are reporting a rise in capital values.
Commenting on the survey results Sachin Sandhir, Managing Director and Country Head, RICS India, said: "Indian Real Estate is experiencing a downturn due to the liquidity crunch. This may effect small and medium developers in the short run. The silver lining, if any, is that this is a wake up call to the policy makers and the entire real estate fraternity and in the long run will enable us to tighten standards and follow best practices and find better ways of doing business."
Th key findings for Property Survey Q3 2008 stated: "Business demand for property weakened further in Q3 2008, significantly, cracks are now starting to show across many emerging markets."
The net balance for global rents turned negative at a global level for the first time in the survey's history led by particular weakness in US, Japan, Spain Ireland and India.
Rental growth expectations have been also pared back sharply across all markets.
Outright declines in rents are now anticipated in Emerging Asia, for the first time in the survey's history, led by weaker office markets in India and China. Expectations in the US have also sunk to a new low.
The most optimistic rental outlook remains in the UAE closely followed by Nigeria, Ukraine, Germany and Brazil amongst others.
The survey is based on a total of 410 responses in which respondents were asked to compare conditions over the latest three months with the previous three months. Survey questionnaires were sent to real estate organisations in March 2008, with responses received up until the end of April 2008.