LONDON-The supply of distressed property onto the market is likely to rise more quickly in Europe than in any other world region in first quarter - notably in Ireland, Hungary, Germany and UK, says the Royal Institution of Chartered Surveyors.

“The prospect of more distressed properties in real estate markets that are still under severe pressure will inevitably compound the squeeze on pricing,” said RICS Chief Economist Simon Rubinsohn in a recent report.

The RICS Global Distressed Property Monitor for the fourth quarter hints at an increase, a trend set to quicken in Q1 in 40% of countries it covers - with the biggest increases expected in Ireland, Hungary, Germany, Portugal and the UK. Russia is expected to see a decline in this flow. Interestingly, RICS said, the survey also reveals a fall in the number of specialist funds seeking distressed property, from 21 countries in Q3 2010 to 18 in Q4 2010.

German distressed property coming onto the market rose considerably in Q4, while the forecast for 1Q11 has increased. Russia saw numbers decline less steeply in Q4 than in the previous quarter, while numbers in Spain and Portugal fell dramatically. This improvement is set to continue this quarter in Spain but to rise slightly in Portugal.

The survey, which monitors 25 commercial real estate markets around the world, shows that the number of distressed properties is likely to rise in 16 of those markets, with the supply outstripping expected demand in one third of them.

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