Ireland and the US are set to see the biggest rise in distressed sales, says RICS research published today (7 June 2010). Accoring to RICS Global Distressed Property Monitor Q1 2010, real estate professionals expect the number of distressed properties coming onto the market in the second quarter of 2010 to increase across 19 of the 25 countries surveyed.
Respondents in Ireland and the US expect to see the fastest growth in activity followed by Scandinavia, New Zealand and Hungary. However, there is positive news from Hong Kong, Australia, China and India where agents expect distressed sales to decline.
In the first quarter, 17 out of the 25 countries surveyed reported an increase in distressed sales*, a marginal improvement on the 18 countries reporting three months earlier. The largest growth in distressed sales was reported in the US. In Europe, agents reported the fastest growth in the Republic of Ireland followed by Switzerland, Italy, Hungary and Portugal. In Russia and France the property market is improving and distressed sales decreased over this quarter.
RICS members work on both sides of any distressed property transaction. Consequently, the survey asked surveyors whether the level of interest from specialist funds in distressed properties was increasing. Levels of interest rose across 20 out of 25 countries down from 21 in the previous quarter.
Commenting, Oliver Gilmartin, RICS senior economist said: "The issue of distressed property assets has not yet gone away despite a modest recovery in values across most global property markets in the past 6-12 months.
Indeed, this is the thunderous cloud which overhangs the market despite some glimmers of light having shone through in the past year as risk appetite has improved.
The results suggest that banks may be starting to manage down their property loan books particularly in parts of Western Europe. Clearly, Ireland and the UAE stand out as markets where this process is expected to accelerate in the coming months.
RICS Global Distressed Property Monitor
*A distressed property is defined as a property that is under a foreclosure order or is advertised for sale by its mortgagee. Distressed property usually fetches a price that is below its market value.
The survey is available at: www.joinricsineurope.eu/en/pressroom