LONDON-Real estate professionals across 19 of 25 countries, in a survey by the Royal Institution of Chartered Surveyors, expect the number of distressed properties coming onto the market in second quarter 2010 to increase. Respondents in Ireland and the US expect the fastest growth, followed by Scandinavia, New Zealand and Hungary.

According to the locally-based organization, there is positive news from Hong Kong, Australia, China and India where agents expect distressed sales to decline. In Europe, apart from Ireland, agents reported fastest distressed property growth in Switzerland, Italy, Hungary and Portugal. In Russia and France the property market is improving and distressed sales fell over this quarter. RICS members work on both sides of any distressed deal. Consequently, the survey asked surveyors whether interest from specialist funds in such assets is increasing. It found levels of interest rose across 20 out of 25 countries down from 21 in the previous quarter.

Oliver Gilmartin, RICS senior economist, commented: “The issue of distressed property assets has not yet gone away despite a modest recovery across most global property markets in the past  six to 12 months. Indeed, this is the thunderous cloud which overhangs the market despite some glimmers of light having shone through in the past year as risk appetite has improved. The results suggest that banks may be starting to manage down their property loan books particularly in parts of western Europe. Clearly, Ireland and the UAE stand out as markets where this process is expected to accelerate in the coming months.”

Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.