Distressed sales continue to threaten the progress of market recovery across the globe, particularly in the US, UAE and Ireland as banks work to clear out loans. The number of nations with rising distressed sales is likely to grow in the second quarter, while only a minority of markets including Australia, India and parts of Asia are improving. See the following article from Property Wire for more on this.
Ireland and the US are set to see the biggest rise in distressed property sales, according to research from the Royal Institution of Chartered Surveryors.
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 for its Global Distressed Property Monitor report.
Distressed real estate sales are described as ‘a thunderous cloud that hangs over the market’ and although there are signs of improvement sentiment is pretty gloomy, the report shows.
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Respondents in Ireland and the US expect to see the fastest growth in activity followed by Scandinavia, New Zealand and Hungary. The UK has also seen deterioration in sentiment with the net balance of those expecting distressed sales to rise moving from 14% to 42%.
However, the report shows that there is positive news from Hong Kong, Australia, China and India where agents expect distressed sales to decline. There were also marginal declines in Brazil and Canada. France and Russia also reported modest declines coming on the back of an increase in distressed properties last quarter.
In the first quarter of 2010, some 17 out of the 25 countries surveyed reported an increase in distressed sales, a marginal improvement on the 18 countries reporting a similar position three months earlier. The largest growth in distressed sales was reported in the US, followed by the Republic of Ireland and the United Arab Emirates. However, the pace of increase moderated across the majority of markets with the UAE a notable exception.
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.
‘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 to 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,’ said Oliver Gilmartin, RICS senior economist.
‘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,’ he added.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.