Signs of recovery are becoming visible in some European housing markets, especially in sales levels and prices, according to the latest Royal Institute of Chartered Surveyors (RICS) European Housing Review released today. The report notes that a significant number of European residential markets are starting to revive from the early- to mid-2009 declines and projects further growth in the sector, fueled by low interest rates and reviving economies. However, the report warns the 2010 recovery will be “more limited than the last major one in the 1990s,” and countries with vulnerable economies will continue to experience depressed markets and falling prices. Across Europe, many countries saw a return of prices. In Norway, house prices increased 12%, and similar increases of 8% and 7% were seen in Finland and Sweden, respectively. Prices were up 1% in the UK for all of 2009, but up 10% from the April 2009 trough. Other markets experienced declines between 4% and 6%, including Germany, Italy, Netherlands and France, but RICS said those markets are also on the verge of stabilization and are poised for future growth. “The shallowness of the downturn in core European housing markets has surprised many commentators. But Europe is not the USA, and the problems and policy responses have been different,” said Michael Ball, the report’s author. “Mortgage defaults have only risen modestly. Low interest rates and central bank support for mortgage markets have played key roles in bringing recovery.” The worst markets were Ireland, Spain, Greece, most central and eastern European countries. The Baltic States were hit particularly hard. There, prices declines ranged from 27% to 53% in 2009. Together, those countries form a geographic “unlucky horseshoe around the edges of Europe.” “Huge problems remain unfortunately,” Ball added. "Housing markets around the fringe of Europe are still dragging down economies in a vicious circle and all European housing markets continue to face credit constraints and great uncertainty." Write to Austin Kilgore.