LONDON-Growth in global distressed property listings eased in more than 85% of countries surveyed in a report by the Royal Institution of Chartered Surveyors.
In the second quarter, 13 of the 25 countries surveyed reported an increase in distressed sales, an improvement on the 17 countries reporting in the first quarter. The largest growth was reported in Portugal, followed by the US and Republic of Ireland. However, the pace of increase moderated across the majority of markets with only three countries - Portugal, Spain and Germany - reporting that distress in the market is increasing at a faster pace than last quarter.
Real estate professionals expect the number of distressed properties coming onto the market in the third quarter to increase further in 14 of 25 countries surveyed. Respondents in Portugal and Ireland expect the fastest growth, followed by Spain and Scandinavia.
In regard to distressed listings, a clear divide appears to be opening up between the US/European markets and the rest of the world, says RICS' Oliver Gilmartin. Worries over the health of the European banking system will continue to linger, propelling banks to manage down their problem loan books.
"Changing international regulations are likely to start raising the cost of capital of holding commercial property on bank’s balance sheets, which could be the trigger for increased listings in the coming year," Gilmartin said.
Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.
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