Real estate professionals in 25 countries expect more distressed properties to come onto the market in Q1 2010, although in fewer countries than in the latter half of 2009, according to the latest Global Distressed Property Monitor from the Royal Institution of Chartered Surveyors (RICS). The survey is based on responses from real estate organisations about market conditions in Q3 2009 compared with the previous quarter.

The US and Japan are expected to see the biggest rise, with China, Germany and the UAE next in line. Eighteen of the 25 countries surveyed predicted a pick-up in distressed properties in Q4 compared to three months earlier.

Levels of interest from specialist funds rose across 21countries in Q3, up from 18 in the previous quarter with Spain, Republic of Ireland and
Scandinavia reporting the most notable upturn. Investor appetite from specialist funds also improved in the UK although it was less strong than across most other markets.

The RICS defines a distressed property as one that is under a foreclosure order or is advertised for sale by its mortgagee. Distressed property usually fetches a price that is below its market value.