The latest UK Retail Property Auction Index shows that in the final quarter of 2012 the index decreased to 88.0 representing a change of -1.2% year-over-year.
The IPD/Acuitus UK Retail Property Auction Index, produced in association with EIG, is based upon the change in retail property values sold at auction. The index provides greater transparency on price movements observed in the UK auction rooms, which are often seen as a leading indicator for the secondary market.
Acuitus Chairman, Richard Auterac, comments: “Whilst this is the lowest point that the index has reached since 2003, it is also the slowest rate of decline since 2010.
“The average year-on-year fall for 2011 was -17.30% but for last year it was just -4.28%. So there has been a dramatic reduction in the rate of decline in the Index which would seem to indicate that prices are bottoming out. As a matter of interest, at the height of the market in Q4 2007, the index stood at 132.1.
“The disparity between pricing achieved in the auction room and valuations is vividly illustrated by the corresponding IPD valuation index which stands at 99.7.0. As you might expect while the RPAI only fell by 1.2% in Q4, the valuation index tumbled 4.6%.
“It is apparent that valuations still need further adjustment to reflect where prices are by at least a further 10% and could be as much as 20%.”
To download the RPAI for Q4 2012 please click here