The worst of the downturn may be in sight for the European property market, but the volatility exhibited in the current market is here to stay.

That was the verdict of a panel of experts at the European Public Real Estate conference in Stockholm, Sweden, this morning.

‘I think we’ll be moving sideways for a while, but it will be quite volatile,’ Chris Turner, head of the listed TR Property Investment Trust, said.

He added that the downturn in oil prices had removed some of the immediate inflationary pressures on the economy which had fed through to confidence in real estate.

‘You’ve now got quality property changing hands at capital values of around 7%, and that will suck in fresh capital.’

However, Bardon Gale, director at US investment manager Starwood, said that the current volatility in the property market was also keeping equity-rich investors such as sovereign wealth and pension funds on the sidelines in the short term.

‘What has happened to values has really shaken people,’ he said. ‘Ín some cases now land has negative value.

'That makes it a great opportunity, but it means people are stepping back from construction and development.'