According to the International Monetary Fund (IMF), the current economic downturn could last anything up to eight years. As such the body has claimed that the prospects for the global property market are looking "dismal".
The IMF has voiced concerns surrounding both the "bust" countries, such as the US, Spain and Ireland, and the "rebound" economies, such as those found in the Asia Pacific region.
"Especially in the United States, given the limited success of mortgage modification programs and the shadow inventory from foreclosures and delinquencies, this has renewed fears of a double dip in real estate markets
. A lot will depend on the path of economic recovery: if employment creation remains low, risks of a double dip in housing naturally increase," the IMF said.
In addition, the body cited other threats as well. Record high delinquency rates on commercial mortgage-backed securities and the US 566 billion in commercial real estate debt due this year and next, according to data the IMF took from Foresight Analytics.
- Monday 18 October 2010