Residential property is still in high demand. This is evidenced in the survey of 80 real estate agents, brokers and managers conducted by the association of homeowners in autumn each year. Like last year, the majority of those surveyed therefore expect to see rising prices. In 2010, the demand for commercial property recovered slightly. But forecasters expect prices to continue to fall.
Higher prices, especially for condominiums
49% of those surveyed expect prices for single-family homes to remain stable in 2011 while 42% expect them to increase. For owner-occupied flats and condominiums, 44% expect stable prices, 47% expect moderate increases and 5% even expect strong price increases. There is a marked trend towards rising prices in 2011, especially in the condominium segment.
Multi-family houses are also in strong demand. In this segment, 57% of those surveyed expect moderately rising prices while 12% expect steep price increases. As for rents, 56% expect no change while 40% expect rents to continue rising. The majority of those surveyed anticipate further increases in building land prices: about 70% expect higher building land prices in 2011. The remainder believe prices will remain stable.
Negative returns on multi-family houses
Returns on multi-family houses remain on a downward trend. This is due to the rising purchase prices. For new buildings, the average gross return for multi-family houses was 5%.
Prospects for commercial property less gloomy
Price trend forecasts for commercial real estate are somewhat less gloomy than last year. Nearly 40% of survey participants expect prices to fall in 2011. The year before, the number was 63%. Many participants expect construction costs to start rising again in 2011, after a short break. While a significant 32% of those surveyed in 2009 expected construction costs to rise in the following 12 months, only 1% took that view in 2010. Lower gross returns on new commercial property are also expected. This trend will continue too.