GLOBAL - Ireland and the US are expected to see a significant increase in distressed real estate sales in the short term, according to research from the Royal Institute of Chartered Surveyors (RICS).

Real estate professionals predicted the number of distressed properties coming onto the market in the second quarter of 2010 would increase across 19 of the 25 countries surveyed.

Respondents in Ireland and the US expected to see the fastest growth in activity, followed by Scandinavia, New Zealand and Hungary.

Conversely, property agents in Hong Kong, Australia, China and India expected distressed sales to decline during the three-month period.

In the first quarter, 17 of the 25 countries surveyed reported an increase in distressed sales, a marginal decline 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.

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.

Oliver Gilmartin, senior economist at RICS, 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 that overhangs the market despite some glimmers of light having shone through in the past year as risk appetite has improved.

"The results suggest banks may be starting to manage down their property loan books, particularly in parts of Western Europe."

 

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