Rental values in 4Q 2001 declined by about 5.4% against the previous quarter (again the biggest drop since the first quarter of 1999) according to URA figures. For 1Q 2002, our indications revealed a drop in monthly effective rentals (as measured in major office submarkets submarkets) of some 5% to 7% as economic sentiments remain weak despite signs of an impending recovery. online house valuations This is the fourth consecutive quarterly decline for the year and is a hefty drop compared to the 3.7% decline in the third quarter.
For 1Q 2002, our indications showed that capital values have fallen again by some 5% to 9% amidst declining rentals while yields improve. This price is reportedly the lowest for a freehold office building in the CBD in the last 10 years.
The latest development charge (DC) rates which took effect on 1 March 2002 declined by between 9% and 16% compared to the last revision half a year ago. DC rates for commercial property (including office) uses have dropped an average of 10.5% across all geographical sectors. The economy grew, in annual terms, by 5.6% in 4Q 2001 over the previous quarter, reversing the trend of annualized declines for the first three quarters of 2001.
This was mainly contributed by fresh economic impetus towards the end of the year, specifically in the manufacturing sector. In view of recent signs of the recession bottoming out, the Ministry of Trade and Industry has revised its forecast of economic growth to between 1% and 3% for 2002, up from its previous forecast range of -1% to 1%.