International Real Estate Report

  • New FDI Report from NAR Available
  • Can BRIC Save the Economy?
  • Hispanic-Owned Business Growth
  • U.S. Immigration to Go Paperless
  • Online Property Registration Introduced in Dubai
  • Forbes Prediction for 2009 Real Estate: Bleak
  • Looking Beyond the Current Market Crisis
  • Watch, Listen and Learn!


FOREIGN INVESTMENT

New FDI Report from NAR Available
The new foreign direct investment (FDI) report from NAR reports that foreign investment in the U.S. real estate sector rose in 2007 to $41.7 (up from $33.6 billion in 2006), continuing the uptrend that began in 2003. This is encouraging in light of downturn in the U.S. market that began in 2006. The 19-page report covers foreign investment in U.S. real estate with a breakdown of the major countries with significant holdings and provides an overview of today's market and a forecast for the coming year. Bottom line: prospects are good for continued healthy investment in U.S. real estate, given the strength of foreign currencies in relation to the U.S. dollar. Download full report (286K) or access the full list of NAR International research reports.


Can BRIC Save the Economy?
The global financial crisis is taking a toll on many formerly lucrative sectors, including the four so-called BRIC countries: Brazil, Russia, India and China. Until recently many thought these emerging markets were isolated from the global financial turmoil. Russia has been hard hit be the decline in oil prices; China and Brazil will see a drop in demand from the USA and Europe for their exports; and similarly, India's services sector, oriented towards developed economies, is likely to suffer. The recent terrorist attacks in Mumbai may delay further foreign investment, at least in the short term. Yet many analysts believe that strong foreign exchange reserves and growing domestic demand will allow BRIC to withstand the crisis and continue growing. As of early November, these four nations held 41% of total global foreign exchange reserves and, collectively, represent 2.8 billion consumers. With the U.S. and Europe looking at a slow recovery, eyes are on the BRIC countries with the hope that their growing consumer demand will help "rescue the world," according to Goldman Sachs Group economist Jim O’Neill, who coined the acronym BRIC in 2001. Read Bloomberg's analysis of why the BRIC consumers are the key to the continued growth of a global economy.


CULTURALLY CORRECT

Hispanic-Owned Business Growth
Commercial REALTORS® take note! The growth of Hispanic-owned and operated businesses in the U.S. grew 31% between 1997 and 2002, a rate three times higher than any other business sector, according to a 2006 report by the U.S. Census Bureau. By 2007, 45.5 million Hispanics were in the U.S., a 29% increase of the 35.3 million present in 2000, according to the National Population Bureau, making up the majority of people in Texas, California, Hawaii and New Mexico. That growth is positively affecting Hispanic-owed businesses and subsequently the homebuying power of Hispanic residents. In 2002, the most recent year for which data is available, a reported 1.6 million Hispanic businesses generated $222 billion in revenue. The U.S. Hispanic Chamber of Commerce projects that the number of Hispanic-owned businesses in the U.S. will grow to 4.3 million within the next six years, with total revenues surging to $540 billion annually and a purchasing power $1 trillion. REALTORS® serving this group may want to be prepared to advise on financing options. The recent credit crunch may impact the Hispanic market harder as histoically some have no credit or collateral to apply for loans. Many Hispanic business owners stockpiled the money needed to open their shops because of a lack of lending opportunities. Get more data on the U.S. Hispanic population.


U.S. Immigration to Go Paperless
The Bush administration has formed a coalition to improve the handling of some 7 million applications annually for citizenship, visas, and work authorization in the United States, reported the Washington Post on November 7. The five-year, $500 million project is designed to convert U.S. Citizenship and Immigration Services' case-management system from paper-based to electronic. It is estimated that the change could reduce backlogs and processing delays between 20% to 50%. The new system would enable the U.S. Border Patrol, the FBI, and the Labor Department to access immigration records quicker and with greater accuracy. Efforts also have been launched to link unique identification numbers to digital fingerprint scans, allowing the new system to create a life-long digital record for applicants. The need to fill out paper forms would be eliminated as well; such documents are currently stored across 200 locations. Read the full story.


GLOBAL MARKETS

Online Property Registration Introduced in Dubai
The Dubai Government has launched an online property registration scheme, called Oqood, designed to provide greater transparency and eventually create an online property price index. Dubai's Land Department in conjunction with the Real Estate Regulatory Authority (Rera), said the online application will enable the effective implementation of Law No. 13 of 2008 for regulating the interim real estate register in Dubai, which protects the interest of all parties through closely monitoring sales transactions. Among other benefits, Oqood will help to minimize conflicts arising between developers, investors and sellers, while contributing to cutting down the escalating off-plan selling (sold before they are built) and reselling costs. There is a need for more transparent data as until the recent global credit crunch, many properties were being sold off-plan. A property price index database will help investors and end-users to determine price in a very transparent way. More than 80,000 units have already been registered with Oqood.


Forbes Prediction for 2009 Real Estate: Bleak
Keep this mantra in mind as we approach 2009: "All markets are local." This has never more true than right now when the global credit crunch seems to have left no market unscathed. Previously red hot markets (such as Slovakia and Bulgaria) and reportedly "bubble-proof" markets (think Dubai) are all feeling the impact of the market slowdown which began in the U.S. and spread globally. Forbes.com recently took a global look at the real estate market and identified "10 Top Real Estate Challenges," a snapshot of 10 global market areas and forecasts for 2009. In short, Forbes suggests that the barometers are expected to remain bleak, and that many economists believe the bottom has yet to arrive. The "bottom" being defined as 2003 price levels, which is the point at which price booms began around the world. Others counter that the composition of the housing market has fundamentally changed during the past five years, so a 2003 mark is not reliable. Read the full Forbes article, but remember...."All markets are local!"  


BUSINESS RESOURCES

Looking Beyond the Current Market Crisis
The roller coaster economic market of the past few months and global credit crunch are having a big impact on the market right now, but there are longer-term forces that REALTORS® need to consider when reviewing business plans. An aging global population, rapid urbanization and new migration patterns are among the key demographic trends driving real estate strategy, according to a 2008 report, Global Demographics 2008: Shaping Real Estate's Future, published by the Urban Land Institute (ULI). The report is available for purchase ($49.95 for nonmembers with December shipping specials). Highlights provided in Reuters press release. The ULI publication looks at demographic trends in global markets, including how aging, household size, the labor force, income levels, and more will impact the underlying demand for real estate. This is the first volume in an annual series. This edition, while global in coverage, focuses on North and South America. While the U.S. is now "officially" in recession, turns out we've been in one for nearly a year, which is good news as, historically, recessions last about 11 months on average. This one may be a little longer than average, but most economists are predicting a turnaround by the end of 2009, which means REALTORS® need to be focused on the longer-term market as well as managing the current slowdown.


Watch, Listen and Learn!
NAR recently announced the creation of a Educational Media Library (EML) with the goal of being the global real estate industry’s most dynamic web-based learning tool. Given the current market challenges, global real estate professionals need more resources than ever before to stay informed of the latest trends and develop innovative strategies for success. The EML will provide these resources in an efficient and cost-effective format. Set to go live in January, the EML will offer top-quality video resources including webinars, seminars and self–produced user submitted sessions that draw from a large pool of subject matter experts in global real estate. Content formats include timely analysis, market updates, how-to sessions, panel discussions and more. Sessions are geared for different levels of professional experience and live webinar participation allows the participant to ask the instructor questions in real-time. The web-based content will be translated into several languages. The EML will be accessible through Real Estate Connections TV website, which is currently in a beta launch. The site is available for registration and global market networking. January 14--Global Networking Day--will mark the full blown launch of the site. Go online on that day to be entered to win prizes, and look for more information on the Educational Media Library!

Report compiled by NAR International Operations, narglobe@realtors.org.

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