The US and Japan are set to see the biggest rise in distressed sales in the first quarter of 2010, according to RICS.

Real estate professionals expect the number of distressed properties coming onto the market to increase across 19 out of 25 countries surveyed. Respondents in the US, Japan, China, Germany and the UAE expect to see the fastest growth in activity.

However, respondents in Brazil, India, Hong Kong and Australia are more optimistic and expect fewer distressed property listings in these countries.

In the current quarter, 70% of the countries surveyed reported an increase in distressed sales, a slight improvement on the 80% reporting three months earlier. The biggest pick up in distressed sales was reported in China, followed by Spain, Japan and the Republic of Ireland but the pace of increase moderated across the majority of markets compared to the third quarter. Indeed, Brazil, Hong Kong, Australia and India reported a decline in the number of distressed properties coming onto the market.

RICS members work on both sides of any distressed property transaction. Consequently, the survey asked surveyors whether the level of interest from specialist funds in distressed properties was increasing. Levels of interest rose across 21 out of 25 countries up from 18 in the previous quarter with Spain, Republic of Ireland, UK, US and Scandinavia seeing interest rise at a faster pace.

Oliver Gilmartin, RICS senior economist said: “Some moderation in the pace at which distressed properties are hitting the market is to be welcomed although this in part reflects the fact that interet rates globally are still at record lows. With longer term borrowing costs set to move upwards over the course of 2010