GLOBAL - Real estate transaction levels around the world rose for the first time in 18 months and Real Capital Analytics (RCA) predicts this will transpire to be a sustainable trend.
 
In its latest Global Capital Trends report, RCA found that global transaction volumes rose by 17% in the second quarter of 2009 when compared with the previous three-month period.
 
Although, the report labelled this a "modest resurgence", it went on to forecast further growth in Q3.
 
"The increase in Q2 is a positive sign that appears to be turning into a solid trend," RCA said.
 
Global sales remain at low levels, with only $116.4bn (€81.3m) traded in the first six months of 2009, which is equal to 65% of transaction levels during the first half of 2008, and $500bn less than the same period in 2007.
 
But a positive indicator is that the pace of transactions is quickening and spreading beyond Asia, which RCA cited as the primary source behind the Q2 increase.
 
The purchase of land rights in China, fuelled by the government easing of credit, was the primary driver for the turnaround in transactions.
 
If it wasn't for the Chinese market, which saw sales volumes in H1 2009 exceed that of the US and UK combined, global transaction volumes would have been down by 8% in Q2, the report found.
 
However, while China may have been the catalyst in Q2, investment momentum throughout Asia Pacific is continuing into the third quarter, which RCA predicted would lead to a V-shaped recovery for the region, unlike in Europe and the Americas.
 
"Recovery of property sales in Europe is shaping up to look more like a U," RCA said.
 
The report also warned that the growth in transactions is only "a first step in the recovery process".
 
RCA said: "Pricing and operating fundamentals remain in decline and debt remains scarce."
 
The volume of troubled real estate in default, foreclosure or bankruptcy continued to mount in Q2, with a further $96bn bringing the total to over $233bn globally.

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