International Real Estate Report

Global Resources for Local Markets
  • REALTORS® With Investors Interested in Panama: Take Note!
  • U.S. Tops Global Competitiveness Report
  • New Year's Resolution for REALTORS®: Think Globally!
  • Europe Seeks Best & Brightest Home Buyers
  • The Wild, Wild East is Tamed
  • Importance of Luxury Home Market Trends to the Rest of Us
  • Jones Lang LaSalle Uses Technology to Serve Client Needs
  • New Study Shows 1 in 8 Persons in the U.S. is an Immigrant


FOREIGN INVESTMENT

REALTORS® With Investors Interested in Panama: Take Note!
Panama is a growing destination for second home and retirement buyers, and is particularly attractive to Americans due to the historical ties, U.S. dollar currency, and easy access. In 1999, the U.S. State Dept. reported that nearly 20,000 Americans lived in Panama, and more recently, the Migration Policy Institute reported U.S. retirement visas to Panama tripled between 2003 and 2005. Two recent developments in Panama will positively impact those considering a home or investment in Panama. First, the 90-day tourist visa for U.S. citizens has been reinstated, after having been previously reduced to 30 days. Read more on Panama News blog. The second development is that the Ministry of Housing has extended the 20-year property tax exemption to all homes and condominiums receiving their building permits before Dec. 31, 2009 (construction to be completed and registered by Dec. 31, 2011). Iván Carlucci, 2007 president of the Asociación de Corredores de Bienes Raíces (ACOBIR)--NAR's bilateral partner in Panama--believes the waiver will give Panama a competitive edge over other countries in marketing real estate projects. Read frequently asked questions (and answers) about buying real estate in Panama. U.S. REALTORS® take note--you must be licensed in Panama to sell Panamanian property. If you have interested clients, contact a member of ACOBIR to discuss a cooperative agreeement.


U.S. Tops Global Competitiveness Report
The United States tops the overall rankings in The Global Competitiveness Report 2007-2008, with Switzerland in the second position followed by Denmark, Sweden, Germany, Finland and Singapore, respectively. The rankings are calculated from publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted annually by the World Economic Forum. For this report, more than 11,000 business leaders were polled in 131 countries. The report is widely used by companies deciding where to invest, and by countries seeking to identify weak spots that might deter investors. Savvy investors should drill down into the data as the overall rankings seldem tell the whole story. For example, Kenya ranks very poorly on a number of areas such as business impact of malaria (113th), accounting for its 99th place ranking, but ranks 8th for legal rights tied to the financial markets. Closer to home, the U.S. ranks high in many areas (number one in 10 categories), but a close examination of the data shows it ranks 89th for government debt and 107th for saving rate. The report is available online in an interactive format that provides country-by-country analysis and also by rankings of all countries by 12 key factors.


CULTURALLY CORRECT

New Year's Resolution for REALTORS®: Think Globally!
NAR has been saying it for years, but for those looking for an third party confirmation of the shift from the local marketplace to the global marketplace, RISmedia ended the year with an excellent commentary, written by John N. Vatista, Chairman of Equitable Sotheby’s International Realty in Scottsdale, Ariz., on why real estate professionals need to be thinking globally. REALTORS® should review their 2008 business plan and integrate this business cultural shift into specific business development activities. NAR offers a wealth of resources and tools to help identify, serve and grow an international business client base. Visit www.realtor.org/international to explore the many tools and services available.


Europe Seeks Best & Brightest Home Buyers
The European Union recently proposed a "blue card" program to attract highly skilled workers to Europe, which could further complicate U.S. companies' efforts to hire foreign tech workers. Historically, the U.S. has done a good job of attracting the world's highly skilled workers, many who welcomed the opportunity to come to this country to work and live (and buy property)! In recent years, though, homeland security issues have increased the red tape related to coming into the U.S. and/or obtaining permanent residency, resulting in a loss of talent and homebuyers that the EU seeks to welcome. Similarly, U.S. universities attract tens of thousands of students from China, India, and other countries looking to obtain advanced degrees, and foreign nationals account for the majority of U.S. doctoral degrees in math, computer science, and engineering, but many of these students find it easier and more appealing to return to their home countries than to navigate the U.S. immigration system. For the EU's blue card program to be realized, all 27 EU members need to agree on major immigration policy changes, leading some analysts to believe that the blue card program will not go into effect until 2009, giving the U.S. at least a year to address the skilled workers gap. Read an in-depth assessment of the situation in Investor's Business Daily.


GLOBAL MARKETS

The Wild, Wild East is Tamed
The formation of Dubai's Real Estate Regulatory Authority (RERA) last July is helping to shape a previously uncontrolled market into an organized global property market with market watchers projecting that by the end of 2008, Dubai real estate will be in a legal position similar to most global markets, and its electronic land registry ahead of many markets. Recently announced was a 5% rent cap for 2008, representing a gradual reduction which started at 15% in 2006, and then to 7% in 2007. This is seen as typical of Dubai's pragmatic approach to managing economic development, as opposed to an abrupt rent freeze. RERA licenses 400+ developers active in the Dubai market, and is responsible for imposing the escrow account law, which requires developers to deposit funds for off-plan apartment projects into a separate account, unless given special dispensation by RERA, protecting the interests of both parties: the buyer knows that funds are correctly held on deposit; and the developer is protected from making poor investments with the money. RERA is working with the Dubai Land Department, the real estate title registry, in registering freehold titles of property sold to date in Dubai, and recently warning property owners that registrations after mid-2008 will be based on a percentage of the market and not original selling price. Legislation on mortgages and multiple occupancy of buildings is expected this year to clarify the rights and obligations of both banks and borrowers. See FAQ on how property is transacted in Dubai, including foreign ownership information.


Importance of Luxury Home Market Trends to the Rest of Us
The global luxury residential market has been largely unaffected by the real estate slowdown. Knight Frank's 2007 Annual Wealth Report looks at the behavior and attitudes of high net worth individuals (HNWIs) as they relate to the residential property market. HNWIs view their residential portfolio as an opportunity for lifestyle enjoyment, individuality and exclusivity. They are aggressive investors and differ from other investors in their attitude toward risk and reward. HNWIs have a higher than average weighting in residential property and their portfolio is internationally diverse. They are happy to invest in emerging economies and are open-minded to alternative investment locations. The report names three key drivers of HNWIs in the purchase of a prime residence or a second home: Time Poverty (convenience and accessibility), Luxury and Prestige. These drivers keep HNWIs pushing at the edge of the market, as they seek to keep ahead of the market either by bidding up prices to retain exclusivity or by exploring new markets. So if your company isn't serving this market, why should you care? Because history shows that where this market niche goes in terms of location and property types, the rest of the market will follow. The study was primarily conducted with UK residents resulting in a somewhat UK/European bent to the report (valuable to brokers serving these investors), but many of the trends outlined are likely applicable to all HNWIs, e.g., the importance of tax issues as they relate to property. The report concludes with trends to watch.

 
BUSINESS RESOURCES

Jones Lang LaSalle Uses Technology to Serve Client Needs
Real estate experts from Jones Lang Lasalle (JLL) are sharing industry insights through the company's new OneView Podcasts, touted as the industry's first podcast program. OneView Podcasts can be downloaded to a computer or iPod. JLL research shows clients want relevant and timely information at their fingertips. The proprietary audio and video podcasts are short, concise clips (most less than two minutes in length) featuring non-promotional information on current trends, market realities, dynamics and personal opinions. Subscribers can anticipate one to three new podcasts each week, many of which will link to articles and research for those looking for more extensive information on a topic. Anyone can subscribe and select a preferred format to receive the new podcasts--by e-mail, over iTunes, or as an RSS feed. Listen to past podcasts (since its Sept. '07 launch) and/or subscribe to receive new podcasts. While many topics have a distinct U.S. focus, international specialists take note that a Global Issues Podcast will be introduced in 2008!


New Study Shows 1 in 8 Persons in the U.S. is an Immigrant
Immigration into the U.S. over the past seven years was the highest for any seven-year period in U.S. history, with 10.3 million new immigrants arriving during this time, according to a new study from the Center for Immigration Studies in Washington, D.C. This means that, today, one in eight persons in the U.S. is an immigrant, totalling 37.9 million people, the highest level since the 1920s. The report, available for download, has generated some debate among researchers, primarily in the area of conclusions drawn by Steven Camarota, who conducted the survey. There does not appear to be any questions as to his methodology. Some feel the study focuses only on the public cost associated with new immigrants (legal and illegal), but not on the contributions they make, nor the fast rate at which they progress and become part of the mainstream. Regardless of personal feelings about immigration--legal or illegal--it's a topic that directly impacts the housing market. Highly-skilled immigrants are likely to look to purchase a home soon after arrival. Those with a lower level of skills tend to value homeownership and work hard to achieve it. NAR research shows that within six years of arrival, immigrants homeownership rates are nearly equal to that of natural born citizens. NAR offers a wide range of research on international buyers.

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


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