I picked this chart, which comes from the European Securitization publication, to illustrate the illiquidity of European credit markets. The chart tracks recent spreads on commercial mortgage backed securities, but spreads on any similar asset backed security will basically look the same.
Spreads are up and despite all recent attempts by central banks to improve liquidity, spreads remain high. Without a significant fall, wholesale funding for banks will continue to be extremely tight and hence, new mortgage issuance will remain limited. Without new credit, European housing markets will be smothered, and prices will fall and sales volumes will collapse.
(Many thanks to asteve for pointing me towards these numbers.)