Even when the credit squeeze abates, probably early next year, the property market, with its heavy dependence on borrowing, will face a fundamental shift: Historically low interest rates, maintained by central banks in the United States and Europe for much of the past decade, are gone and will not return anytime soon.

Real estate has been the industry responsible for some of the most dramatic changes in Europe over the past decade. Vast investments in coastal regions have turned Spain into the property-boom capital of the Continent, while breathless development has likewise helped transform London into a city of gleaming, innovative office towers.