Anyone expecting a quick recovery for Europe's housing markets think again. According to the Royal Institution of Chartered Surveyors (RICS), the London-based international surveyors body, the deepening global recession is making Europe's housing slump worse.
“Housing markets ... look set for a prolonged down-swing at least as great as that of the early 1990s,” says the RICS European Housing Review 2009.
Depending on the country, the 1990s slump went on for at least three years. Recovery from today's downturn will be slow, because few mortgages are available and few people want one says RICS.
“The financial system has been battered because of mortgage finance, and the riskiness of holding mortgage debt for investors and lenders rises as house prices fall,” continues the report.
It will take a long time for confidence to be restored it warns. In Ireland, mortgage lending reached 135 per cent of personal disposable income in 2006, so prospects are particularly miserable there it adds.
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