The US property industry is heading for a dire year, with rising vacant space, increasing default rates on loans and further falls in prices, industry analysts warn.

After a dismal 2008 – in which sales volumes fell 68 per cent year-on-year according to Reis, a property research firm – the chief constraint on the industry is likely to remain the lack of available credit.

The disappearance of the market for commercial mortgage-backed securities – as credit market turmoil extinguished investor appetite for complex securities – has removed a vital supply line for financing deals.

In 2007, sales of CMBS hit a record $230bn, but that slumped to $12.1bn in 2008 with no bonds issued in the last five months of the year, according to Commercial Mortgage Alert.

Financial Times