GLOBAL - Preliminary data suggests the growth in global real estate transactions slipped significantly in the second quarter of 2010, as the sovereign debt crisis and fears of a double-dip recession took hold, according to Real Capital Analytics (RCA).

Data provider RCA has projected the volume to exceed $80bn (€64.5bn) in the second quarter, and while this is a 10% increase on the second quarter last year, it is significantly lower than the $100-150bn recorded in each of the preceding three quarters.

In its latest Global Currents report, RCA said the initial rebound in transactions had been following a "classic V-shaped recovery", but early transaction data for the second quarter suggested that was no longer the case.

RCA attributed the slowdown in capital to a number of "economic headwinds", such as curbs on lending and real estate speculation in China, the sovereign debt crisis in Europe, volatility in global financial and currency markets and renewed fears of a second economic downturn.

That said, on account of the first quarter's strength, the half-year statistics are still quite robust - with an expected $215bn of sales in the first half of 2010, activity will have increased by 65% over the first half of 2009.

All regions of the globe experienced the slowing in sales gains.

In Europe, the 54% increase in the first quarter fell to 30% in the second, while the growth rate in the Americas dropped from 70% to 47%.

In Asia Pacific, the change has been even more dramatic, with a 232% increase in the first quarter plummeting to a decrease of 10% in the second.

RCA predicted the leading economies of the US and Germany would post healthy gains in sales activity in the second quarter, along with eastern Europe as a whole.

But it should be noted that all three of these markets had been lagging behind most others in the rebound.

In the UK and France, which saw spectacular spikes in transaction volume earlier this year, the rush has subsided, although both will register respectable gains in the second quarter.

Chinese measure to rein in its real estate markets earlier in the year have had an immediate impact on its domestic market and its neighbours Hong Kong and Singapore, and throughout Asia Pacific.

The impact on property sales in China has been severe - sales volume is expected to drop below $20bn in the second quarter, down from over $60bn in the first quarter.

Over the past three years, China's share of total global property investment has risen from 5% to nearly 50%, but over the past quarter, its market share fell back to 22%.
 

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