Foreclosure rates of commercial properties across the EU soar
Commercial property rates hurt, says RICS
The European financial crisis has had severe repercussions for the economies of the various EU countries. Austerity measures introduced by the different governments have had the effect of draining the economy of much-needed cash, further exacerbating the plight of many businesses. It therefore comes as no surprise that some European countries have seen a sharp rise in business insolvencies and also in commercial property foreclosures.
It would seem that Northern Europe has fared better than Southern Europe in this regard. Countries such as Greece, Italy, Spain, and Portugal were hit particularly hard by the debt crisis, while Germany, Denmark, Sweden and others remained relatively unscathed.
Commercial property markets in other parts of Europe have weakened again lately amid fears about the debt crisis in Greece intensifying, and the political instability in debt-ridden Italy further weakening the euro. RICS (Royal Institution of Chartered Surveyors) members foresee an increased number of commercial property foreclosures during the coming months.
Outlook for the future
According to the latest Global Distressed Property Monitor published by RICS, the supply of distressed properties worldwide will increase even further in the near future as the economic turmoil in the eurozone countries remains unresolved.
In Europe, commercial property markets are facing conditions that look bleaker by the day. Negative sentiment is not limited to Europe though – it is fast spreading across the globe. This can clearly be seen by the fact that nearly 75 percent of countries that took part in the latest RICS survey anticipated higher levels of foreclosures in the next three months.
Property professionals who took part in the survey are equally negative about the future. They predict that supply will exceed demand in 60 percent of the countries that took part in the survey – a sharp 20 percent increase over the previous results.
There is a brighter side to the picture though: in Brazil and China commercial real estate markets are still buoyant. Both countries expect a decline in commercial property foreclosures over the near term.
In Europe, Russia and Germany are relatively stable despite high levels of economic uncertainty. German respondents expect the number of commercial property foreclosures to stabilise further over the next few months. Respondents from Russia expect the supply of such properties to decline in the near future.
Commercial property markets in other European countries have once again weakened amid new fears about the Greek and Italian debt crises. RICS members in France foresee a significant increase in commercial property foreclosures.
Predictably Portugal, Italy, and Spain have been hit hard and the number of distressed commercial properties entering the market will no doubt further increase during coming months.to top
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