The joint IPD/RICS Valuation and Sale Price research study has, as in 2006, once again been stretched to cover the four largest property investment markets in Western Europe – France, Germany, the Netherlands and the UK.

In line with our practice now over 20 years, the approach has been to make a detailed and rigorous comparison between prices achieved at the point of sale with preceding open market valuations, each adjusted to reflect overall market movement in the period between the recorded valuation and sale dates – the average lag now stands at just under 9 months.

The samples of sales in each country were sufficiently large to be authoritative, with 527 in France (8% of French IPD databank), 483 in Germany (12% of German IPD databank), 318 in the Netherlands (6% of Dutch IPD databank) and 903 in the UK (7% of UK IPD databank).

The Average Absolute Differences recorded – whether equally or value weighted – were lowest in the UK and highest in France, with Dutch spreads being tight and close to those in the UK, and German results only modestly higher again.

The proportion of sale prices that fell above preceding Market Adjusted Valuations varied from 58% in the UK to 78% in the Netherlands.  Germany again registered an average close to that of the Netherlands, with 76% of assets sold at prices above preceding Market Adjusted Valuations.  French results fell midway between this rate and that of the UK, at 69%.

The patterns of spreads of sale prices about preceding Market Adjusted Valuations were broadly similar in all four countries, with France demonstrating the widest spread, the Netherlands combining a reasonably tight spread but one predominantly skewed towards higher sale prices, and the UK reporting the lowest spread with the least prevalent skew towards higher sale prices.