The commercial property market in general has performed quite well since the start of 2016 but cracks are slowly starting to appear. There are many factors which affect the commercial property market, directly and indirectly, which include the following: (1) interest rates, (2) the stock market, (3) the price of oil, (4) the EU referendum, (5) tax, (6) planning policies, (7) inflation, (8) problems overseas including the USA, China and Russia (9) unemployment and (10) house prices. There are many other factors which also affect commercial property values but those mentioned above are the main drivers. The commercial property market is certainly being adversely affected by the threat of interest rates rising, the problems being experienced in China, the possible exit of the UK from the European Union, stamp duty increases, tax changes affecting buy-to-let landlords and many more.
There is no doubt that commercial property values in some sectors and in some locations are starting to level off and even fall. Many investors are nervous about the market and so are either selling, thinking values have peaked, or are holding off buying anything new.
No-one really knows what the future holds but remember this – if you are likely to face financial ruin as a result of your commercial property falling in value, then when there are signs and talk that this may be on the way, and your commercial property has increased in value from when you bought it, then you would be foolish not to sell.