Foreign Buyers Taking Advantage of Slashed Prices

International investors bought 154,000 homes and condos in the 12-month period ending in May, and are continuing to take advantage of the weak dollar. The U.S. dollar has dropped 9 to 11 percent since June against foreign currencies like the Japanese yen, the European euro and the Canadian dollar. Another attractive feature is that, while the U.S. dollar has weakened significantly, the economy is showing signs of stabilizing along with the housing market. Nearly 46% of international home buyers paid cash for homes purchased, and the median price foreign buyers paid for a home was nearly $80,000 greater than the U.S. national median price. According to msnbc.com buyers from Brazil, Canada, France, and the Netherlands have paid mostly cash for second homes ranging from $6 million to $15 million in condo buildings.

World on the Mend

While housing markets in the world’s leading economies remain distressed, hope is on the horizon. According to globalpropertyguide.com of the 27 countries which have already published their Q3 data, 16 countries have experienced rising prices and falls in only 11 countries. Economies such as the UK, Canada, Germany, Singapore, and South Africa are finally noting positive price changes quarter-on-quarter after being negatively affected during the economic slump. Of this group, the rising prices in the UK, Canada, Germany, and South Africa are the first after suffering declines every quarter since 2008. While some markets’ increases are more modest than others, the over-arching trend is toward recovery. More information on specific housing markets is available at globalpropertyguide.com.

Tracking Global Housing Prices

Housing prices are a bellwether of economic conditions. The Global Property Guide tracks house price changes for the year ending with the latest quarter for which they have data, compared with price changes for the equivalent previous year-long period. They publish both inflation-adjusted and nominal data. Current data available covers 2008 and through 1Q 2009.

High Risk; High Reward Markets

For those with a high tolerance for risk with the potential for reward, Overseas Property Mall has published a list of five markets identified as among the most lucrative for long-term property investors. They are: Albania, Panama, Brazil, Tunisia and Philippines. For REALTORS® and their clients looking long term, the following countries may offer the best opportunity for a big pay-out. To be selected for this list by Overseas Property Mall, the destination had to have a growing economy, a stable investment environment, and be a great place to vacation. Read more about these growing markets.

Real Estate on the Rise in Select Emerging Markets

While much of the world's property markets are grappling with a drop in prices and the global credit crisis, a few markets, among them Brazil, Mexico and Turkey, are on the rise, according to a recent series of Knowledge@Wharton (KW) reports. Markets that tend to be less dependent on credit are faring better with the global credit crisis, whereas much of Western Europe, the U.S. and Japan, where there was easy access to debt, are being most hard hit. Investors should not assume, however, that all markets with a low debt ratio are good for investment. A lack of transparency and corruption both ranked high as reasons to avoid particular markets by participants in the 2009 KW Real Estate Emerging Markets Forum. Other factors included poor infrastructure, unhealthy regulatory environment, bureaucracy and a deficient legal environment. Knowledge@Wharton is an online resource providing access to the thinking of some of the top business minds on issues including finance, marketing, business ethics, and real estate. Read comments by participants on markets to avoid as well as healthy markets, or read a summary article from the Forum on Where the Deals are in Emerging Real Estate. Regardless of opportunity, Forum participants agree that investors should not try to enter a market without a trusted local partner who understands the local environment and business norms. Search for a Certified International Property Specialist (CIPS) in more than 50 countries to assist with outbound investments.