Up-to-date property valuations have become essential in the wake of the global credit crisis, Ad Buisman, head of Ernst & Young’s European real estate division, told PropertyEU at Expo Real.

When certifying and auditing annual financial results, a time lag of three months between the valuation of properties and certification of results is considered acceptable in normal times, Buisman said. 'Today, the time lag must not be more than a week because the market is changing every day.'

Buisman said he was struck by how sentiment in the market had changed in recent weeks. Six weeks ago, property investors were still reasonably positive on the market, but now they have picked up some of the pessimistic signals that first struck bankers. 'Market players are witnessing a small correction in the market, with prices going down slightly and a reduction in deals due to a lack of funding.'

Another striking development, he said, concerns the growing level of non-performing loans which banks are currently sitting on. Funds have been set up in the US to manage non-performing loans, and the trend will also hit the European market, he predicted.