We have noted how the Services sector has started to turn into the weakest link in Europe, the US and maybe even China over the past 3-4 weeks. This has been our key thesis since early summer and so far so good. But what does it mean for Real Estate?

The volumes, both measured in the number of transactions and in the actual lending for housing, are through the floor in Europe (and also in large parts of the US).

The ECB survey from Q3 hints of continued credit deceleration, so volumes will likely remain low until New Years at least, as the credit contraction arrives. 

Chart 1: Volumes are ultra low in housing space