Have Industrial Property Prices Spiraled Out of Control?

By Mr. Propwise

While everyone (including the government) has focused their attention on the residential market, one segment that has gone through the roof is industrial property. In 3Q2012 the Industrial Property Price Index registered a stunning 8.8% quarter-on-quarter growth to hit 183.3, an all-time high. This was the twelfth quarter of growth, and unlike the residential property segment, the rate of growth is accelerating. This begets the question ā€“ have industrial property prices spiraled out of control?

Comparing industrial property prices with other segments

Figure 5.2.1a ā€“ PPIs of various property segments

From Figure 5.2.1a (courtesy of PropertyMarketInsights.com, an essential resource for property investors), we can see that since 2010, the once boring industrial PPI has risen at a much faster pace than the other property types, and has massively outperformed Office and Shop properties. Since 2009Q3, the Industrial PPI has …