The global economic renaissance will remain in grave peril until banks and investors quit mourning the end of a long-dead real estate boom and face up to losses inflicted by years of reckless lending and spending.
While those on the global property market frontline have struggled through phases of shock, denial and acceptance, others are failing to cope with the bitter reality that property values and the price of debt are unlikely to see 2007 levels soon.
Leading industry figures at the 2009 Reuters Global Real Estate Summit will be asked whether reluctant lenders and pipe-dreaming sellers have a responsibility to realize losses, to soothe parched property markets and slake stubborn fears in the underlying weakness in some of the world's biggest banks.
This wait-and-see attitude is pandemic because there are too many uncertainties about too many things, Howard Roth, global head of real estate at Ernst & Young, told Reuters.
They worry about where prices going to shake out, what the accounting or regulatory environment is going to look like.
They don't know when will banks will learn to trust borrowers again or what is going to happen to their local or global economy. This is causing widespread price deferral and will take some time, maybe even years to resolve, he said.
Until investors find reassurance, this stalemate in the global property sector is destined to prevail.
Real Capital Analytics estimates second-quarter 2009 global property transaction volumes are down 67 percent year-on-year to $48.6 billion, reflecting poor demand and poorer access to debt.
Analysts and experts fear the real estate market risks degenerating from sluggish to catatonic until burdened lenders throw off the shackles of bad loans and failing borrowers.
Julian Gabriel, senior principal at private equity firm Doughty Hanson, told Reuters the market needed greater confidence in stability of banks and more visibility in the strength of the occupational markets before it could move on.
Asia is the most polarized of the global property markets, with glimmers of optimism in Chinese land markets offset by a steady stream of Japanese real estate bankruptcies and sliding office sales in Singapore.
In the Americas, fears of a wave of commercial foreclosures and residential mortgage defaults in the United States has hijacked investor attention from markets like Brazil, where demand for shops, offices and homes is outstripping supply.
European investors have seen UK, Spanish and Irish property markets shrink to mere shells of their former selves, but other debt-driven markets refuse to accept they face a similar fate.
Never have we touched the limits of overleverage so closely, and never will we go there again. Actual cash flow will be the universal measure for property values again, said Olivier Piani, chief executive of Allianz Real Estate.
The return of confidence in banks is the key essential to an active and efficient re-launch of the property markets. Different stages of adjustment in single markets make it hard to judge when the bottom will be reached and who hits it first.
Not everyone in real estate is looking backwards. Some investors -- like Blackstone and Morgan Stanley -- have raised huge sums of equity for opportunistic spending sprees while listed firms on both sides of the Atlantic have prized billions of dollars from generous shareholders.
Data from Lipper showed global real estate equity capital markets volumes have spiked 85 percent to $36.5 billion so far in 2009. However, with dark clouds over the economic horizon, even the cash rich are wary about throwing good money after bad.
Stark differences of opinion between some of the world's largest sources of economic insight are making it even harder for investors to judge how much property market pain is to come.
On June 3, Adair Turner, the chairman of Britain's Financial Services Authority (FSA), said the banking sector had passed its point of extreme susceptibility. Dominique Strauss-Kahn, head of the International Monetary Fund, warned on Monday it was too soon to pare stimulus efforts following the most intense period of economic havoc seen since the Great Depression.
Summit participants may have contrasting views on what lies ahead for the global property market but most will agree that investors only have freedom to focus on the future when they reconcile the problems of the past.