Demand for global distressed property rises

The Q4 survey shows that respondents in 21 of the 25 countries included in the report indicated that interest in distressed assets increased during the fourth quarter (compared to 19 in Q3).

Demand from specialist funds rose at the fastest pace in Scandinavia, where 45 per cent more respondents saw interest rise, rather than fall. This was closely followed by the UAE, Italy, France and Japan.

By way of contrast, only three countries reported falling investor appetite in Q4; these being China, Singapore and the Czech Republic.

Despite this, the level of distressed property coming to market is set to continue rising into Q1 2012. Respondents in 17 countries expect supply to increase, and at the fastest pace in euro area markets. 87 per cent of respondents in the Republic of Ireland anticipate more foreclosed selling in Q1.

This is followed by Portugal, Spain and Italy at the top of the rankings. The ongoing sovereign debt crisis in the region is clearly weighing on sentiment, as property professionals in even France and Germany also anticipate more distressed selling.

Simon Rubinsohn, RICS Chief Economist, said:

"The economic news flow remains mixed at best, and sentiment in the real estate sector is still fragile in much of the world as a consequence. In particular given the ongoing and intensifying problems in Europe, it is little surprise that respondents in many of these countries are more pessimistic.

"That said, the rise up in the number of countries reporting rising investor appetite for distressed assets maybe viewed as an indication that prices in the market place are getting closer to offering value."