Emerging Trends Europe participants are cautiously optimistic about the prospects for their industry in 2010. Europe’s economies are recovering and transactional markets are thawing, but there are major uncertainties overshadowing these positive trends.
Concerns centre on two specific issues: whether the withdrawal of government stimulus packages will choke off a fragile economic recovery in Europe, and how the financial system will deal with both the large amount of real estate debt on banks’ balance sheets and the commercial mortgage–backed securities that are maturing.
In 2010, economic growth will be subdued throughout Europe and unemployment will remain high. Capital values of real estate are bottoming out and in some cases, like the United Kingdom, rising sharply in anticipation of recovery. However, the fundamentals of the real estate market are still deteriorating and will remain under pressure.