Real estate professionals are predicting a rise in the number of countries which will see distressed property sales, according to RICS.

In terms of activity in the third quarter of this year, there was a slight decrease in countries showing an increase in distressed properties coming onto the market – from 13 in Q2 2010 to 12 in Q3, however despite the slight decrease in the third quarter, survey respondents to RICS expect the number of distressed properties coming onto the market in Q4 2010 to increase across 16 of the 25 countries surveyed.

Overall distressed listings fell or grew at a slower pace during the third quarter across most markets, with the exception of New Zealand, Italy, Spain, the UAE and Czech Republic.

Oliver Gilmartin, RICS senior economist, said: “With the commercial property market recovery faltering across several countries in the third quarter there is an expectation that banks might be becoming less lenient in extending terms for real estate loans. Renewed falls in rental values may also be making banks more nervous as to the size of their property loan books.

“Significantly, specialist investors appear to be showing increasing interest in distressed property listings. However, ultimately banks hold the keys as to how the market for distressed property listings will evolve in the coming year.”

Professionals expect the Republic of Ireland, US, UK, Spain, Portugal and Hungary to show the biggest rises in distressed listings during Q4, although there is much more positive news from Hong Kong with a large decrease of 53% expected compared with last quarter’s expectation of a 17% drop for Q3.