The pace of decline in capital values accelerated in the first quarter with countries in both Western Europe and Emerging Europe hit by price falls, says RICS' Global Property Survey.

France, the Netherlands and the Republic of Ireland saw capital values drop significantly with real estate professionals in these countries the most pessimistic regarding the near term price outlook (ranked in the bottom quartile of over 45 countries worldwide).

Respondents expect little easing in the pace of price declines in these markets although some moderation in price falls is expected in Spain and the UK.

Agents were increasingly pessimistic towards capital values in many parts of Central and Eastern Europe which was the worst performing emerging market region.

All respondents in Ukraine, Russia, Poland and Croatia reported a fall rather than a rise in capital values with confidence towards the outlook for lettings activity falling back further across the region despite recent G20 announcements.

Rents are falling across more than 90% of the countries surveyed with only Brazil, Saudi Arabia and parts of Africa, yet to report declines.

Surveyors are unanimous that rents are falling in Singapore and Ukraine, while in Russia 97 percent of surveyors reported a fall rather than rise in rents.

Weaker tenant demand has led to faster rises in reported available space which has compounded the gloom towards the rental outlook.

Rental expectations are weakest in Singapore, Hong Kong and Ireland with sentiment in countries in emerging Europe also gloomy – particularly Hungary, Romania and Ukraine.

Available space has risen across every region forcing agents to offer increasingly larger incentive packages in order to secure a letting.

Despite the rental gloom the rapid re-pricing in some markets may be encouraging investor interest. Across the developed regions leading the property cycle, investment demand and lettings demand fell at a slower pace.

Indeed, purchasing activity is expected to rise across Western Europe and Asia for the first time in over a year.

RICS senior economist, Oliver Gilmartin said:

"The rental downturn is gathering momentum across all global markets although some countries which have led the correction in pricing appear to have passed the worst point.

"The re-pricing in developed markets has increased pressure on some emerging locations where on a relative basis assets remain expensive.

"Whilst countries in Emerging Asia saw some improved sentiment off the back of recent stimulus packages, there was little optimism in Eastern Europe which displayed the sharpest declines in occupier activity."