International property investment has increased significantly in 2010, with nations like Brazil and Australia leading the way.
International commercial real estate investment in 2010 is expected to reach up to $290 billion dollars – up almost 40% over 2009 levels. In the US, surging capital markets have seen a significant pickup in activity, with gateway cities on the coast seeing the greatest gains. In the US, transactions are predicted to total between 85 and 90 billion dollars by the end of 2010, a stunning 90% gain over the numbers for 2009.
In the residential markets, Singapore, Hong Kong and Australia are leading the way in house price increases, posting price gains of as much as 34% over 2009 numbers. Not everywhere is as rosy however. Commercial real estate is down in Europe, the Middle East and Africa, and severe house prices declines continue in Ireland, Bulgaria, Lithuania, Iceland, Russia, Poland, Croatia, Spain & Slovakia.
According to GlobalPropertyGuide.com there is still opportunity in the markets, and here are their picks about the best countries to focus on, and who to avoid:
In Latin America
- Interest rates are in long-term decline, due to better Central Bank policies
- Economies are booming
- Tourism is rising
- The residential property boom that began 3 years ago continues
- Rental yields - critical indicators of the health of property markets - are still high
- Latin currencies are rising
Selections for investors: Peru, Panama, Brazil, and Chile Possible: Colombia
In the US
- The economy is recovering
- The dollar is rising
- Residential property valuations are attractive in some states, and are already attracting investors
Selections for investors: states whose property markets fell dramatically during the crisis, beginning with Florida
- Property markets have not sufficiently adjusted from their 15-year rise. Residential property yields are poor throughout Europe.
- The panic over the Greek and other deficits shows no side of abating
- The Euro is falling. Currency depreciation should somewhat offset increased fiscal stringency - a positive.
- There are buying opportunities for opportunities for non-Euro buyers, but of themselves residential properties are not an appetizing investment in most of Europe.
Selections for investors: Turkey, because of its young population, the opening to the East, and its competent government. Possible: Hungary, because its incompetent government may provoke a crisis which would make its low prices and excellent yields even more attractive.
In the Middle East and North Africa
- The Middle East is in a cycle, led by the Gulf. Recovery may take a while, but the underlying dynamic of petro-dollars, pegged currencies, and high domestic inflation, which tends to push property values up. As yield-oriented investors, we are more interested in the marginal markets, but we expect investors to begin to be interested again in the Gulf soon.
Selections for investors: Egypt, Jordan. Possible: Morocco. Note: Egypt and Jordan's property markets have been hard-hit by the crisis. But in both countries' capitals, there are generous yields. Morocco has less attractive yields, but a long term tourism trend.
- Property is over-valued in most countries in Asia, with few exceptions
Selections for investors: Malaysia Possible: Thailand. Malaysia is very stable, and has reasonable returns and Thailand has excellent yields. Prices have been falling, because of the political uncertainty. Developers want to reduce risk by unloading stock. Opportunity knocks.
In the Pacific
- Avoid. Australian residential property is quite overvalued, and interest rates are rising. In New Zealand there is less overvaluation, but less opportunity for growth as well.
Sources: NuWire Investor and GlobalPropertyGuide.com