Two of the key indicators of the health of the property revealed conflicting results this week, highlighting the uncertainty over the property sector.

The CB Richard Ellis monthly index showed the fall in all-property total returns continue to slow. All-property total returns were -0.7% in March, compared to -0.9% in February.

Auction room bellwether
However Jones Lang LaSalle’s commercial property auction on Tuesday achieved a success rate of 70%, a steep drop from the 92% achieved in February, and in line with the 73% success rate achieved by Allsop two weeks ago. The drop in auction success rates, often seen as a bellwether for the property market, has raised the prospect that the sector could be about to experience a ‘double dip’ with a second sharp drop in values and returns.

The CBRE index showed a fall in capital values of 1.2% in March, compared to a fall of 1.3% in February. Income return was flat at 0.5%.

The CBRE index closely foreshadows the Investment Property Databank monthly index, released next Monday, as CBRE values a lot of the properties for IPD.

Positive result in today's market
JLL’s auction saw 36 of the 55 lots offered sold in the room, with two sold prior. Auctioneer Richard Auterac said that the average yield on Barclays bank sale and leasebacks, the blue-chip Benchmark for auctions, was 4.6%, the same as in February, and said that he considered 70% a positive result in the current debt-starved market.

But he said there was far less of a buzz to the room than at previous sales, and that the sale indicated that property could be facing a second downturn.

‘It depends on if you think auctions are behind or ahead of the market or lags behind,’ he said. ‘If you take the view that auctions are six months ahead of the wider investment market, which has proved true before, then it could be an indication that property will undergo a ‘double dip’ in September.’