Capital values edged down in the final stages of 2011 and the weak macroeconomic outlook means that this will not be a blip. The economy will drop back into recession this year. And that will push IPD all-property rental values down by about 2% in 2012. A rise in yields of about 30bps will knock a further 4% off commercial property prices, taking the total decline to roughly 6%. In 2013, there may be some signs of a strengthening in consumer spending and the economy. Reflecting that, our forecast is that capital values will begin to stabilise in 2013.
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