Falling asset values and drastically reduced transaction activity. Sound familiar? Europe’s multifarious residential housing markets may not be a big target for institutional real estate investors but are of interest in normal times as they offer a diversification and return play against commercial real estate markets and investments. But times are not normal. Recession has come to residential and, just as with economies around the world, appears to have come at the same time to all the major markets. There is seemingly no escape. Recession has an inbuilt ability to find bubbles, burst them, cause chaos and create havoc, and residential property is no different.

Recession in residential property is making itself evident in a number of ways: the falling values and reduced transaction volumes alluded to earlier, both functions of lower demand; the unwillingness of individuals to take on the risk of buying in a falling market; the inability o