by jbs081210 e3 — August 18, 2010—Growth in distressed property listings eased back in more than 85 percent of countries surveyed, according to a global report by RICS research published August 4. A distressed property is defined as one that is under a foreclosure order or is advertised for sale by its mortgagee, and usually fetches a price below its market value. In the second quarter, 13 out of the 25 countries surveyed reported an increase in distressed sales, an improvement on the 17 countries reporting three months earlier.
The largest growth in distressed sales was reported in Portugal, followed by the U.S. and Republic of Ireland. However, the pace of increase moderated across the majority of markets with only three countries reporting that distress in the market is increasing at a faster pace than last quarter—Portugal, Spain and Germany.
In contrast, eight countries reported a decline in the number of distressed properties coming to market compared to three months earlier. The pace of decline was greatest in Brazil, Russia, India and Hong Kong. Interestingly, surveyors in Japan indicate a modest turnaround, where the net balance fell from +19 to -6, notes the survey. Other countries showing marginal declines were Canada, Australia and China.
Real estate professionals expect the number of distressed properties coming onto the market in the third quarter of 2010 to increase further in 14 of the 25 countries surveyed (down from 18 in the previous quarter). Respondents in Portugal and the Republic of Ireland expect to see the fastest growth in activity followed by the U.S., Spain and Scandinavia.
However, there is positive news from Brazil, China, Hong Kong, Canada and India, where agents expect distressed sales to continue to decline, notes the survey.
For more information see the RICS Global Distressed Property Monitor Q2 2010.
