Olivier Piani, head of Allianz Real Estate, today warned that the property market will not reach the bottom for another 12 months due to rising unemployment and the scarcity of debt.
Speaking at the opening forum of Expo Real, the European property conference in Munich, he said : "As the economic crisis continues unemployment rates go up month after month. They have just gone up at the end of September, both in the US, Spain, in France, and everywhere else in Europe.
"As long as unemployment goes up I don't think we will see the bottom of the market for real estate.
"The other big thing hanging out there for real estate is the whole notion of debt. There are very few banks lending to the real estate market and the $1.2 trillion of CMBS which will become due in the next three years and which will have to have an impact on the market."
Piani, who is charged with expanding insurance group's Allianz's exposure to real estate, has E10bn to spend. He in the process of buying an asset in Paris, which he says is the most interesting real estate market at the moment.