International Real Estate Report

  • Buying into the USA
  • RICS Releases Global Commercial Property Survey 3Q 2008
  • Words Matter
  • Vietnam: A Market to Watch
  • Middle East Begins to Feel Global Pinch
  • Immigration Slowdown in the U.S.
  • NEW International Events Newsletter
  • Missed the NAR Convention?


FOREIGN INVESTMENT

Buying into the USA
The combination of tighter immigration standards and an excess of real estate inventory provides a win-win opportunity for the United States and for individuals seeking to immigrate here. US-Immigration-Explained.com reports a recent increase in L-1 and E-2 visa inquiries; two options for U.S. immigration related to investments. The E-2 visa pertains to persons involved in non-import/export investments, including real estate. As there is no dollar limit (although there are strict requirements), the E-2 visa provides opportunities for those able to make an investment of as little as $100,000. The L-1 visa requires one to invest in a branch, subsidiary, or affiliate of their company. The main requirement, therefore, is that the foreign person must have owned or been a manager, executive, or person with specialized knowledge of a firm abroad. (A third, the EB5, has dropped in popularity as it requires an investment of half million plus hiring requirements, which is less attractive in the current economy.) Foreigners with the resources and the desire are investing their much-needed equity into U.S. real estate and, in turn, obtaining investor visas. Overall, this may be very good for the U.S. Outside investment in the real estate market will remove excess inventory from the markets, causing the demand-supply curve to favor higher prices and a return to higher valuations.


RICS Releases Global Commercial Property Survey 3Q 2008
The Royal Institution of Chartered Surveyors (RICS)' 3Q 2008 Global Commercial Property Survey was released Nov. 10. The survey, which is a strong lead indicator for property market trends, measures the sentiment of executive-level commercial property professionals from eight regions around the globe. This latest report illustrates the damaging impact of the global economic downturn with no region escaping unscathed. In the U.S., the woes of the financial system and lack of liquidity are showing in the commercial real estate market, with all submarkets (office, retail and industrial) experiencing weak conditions. Outside the U.S. cracks are now starting to show across many emerging markets including Developing Asia and, for the first time, in Emerging Europe. Read the study's highlights, or download the full 32-pg. report.


CULTURALLY CORRECT

Words Matter
In early November media outlets worldwide, including the Associated Press and BBC News, reported on the Bournemouth Council's "plain language" policy, which lists 19 Latin words and phrases to be avoided in official documents, e.g., bona fide or ad hoc, and suggested replacements to minimize confusion. Bournemouth is a town of 170,000 on England's south coast. The news was reported as a "ban," riling language aficionados outraged by what was equated by some as "the linguistic equivalent of ethnic cleansing." The Bouremouth Council countered inaccurate reporting, stating there had been no "banning" of words or phrases; only advice to staff to encourage "plain, appropriate and easily understood language." Much ado about nothing? Perhaps not. There's a lesson here for REALTORS® working with buyers and sellers for whom English is not a first language. Review your contracts to identify words and phrases that may not be easily understood. If appropriate, change them to be more clear. If legal council requires the language to remain as is, develop a "reader's guide" to the contract to spell out more clear definitions and/or to provide examples for key terms. If you deal frequently with customers speaking one or two languages other than English, have your contracts professionally translated.


Vietnam: A Market to Watch
In May Vietnam's government passed a resolution (effective January 1, 2009) that permits foreign individuals and organizations who invest directly in the country and those hired as executives by Vietnamese or foreign-invested enterprises to purchase and own apartments in Vietnam. The legislation will be implemented on a trial basis for five years. Read about specific opportunities and limitations of the law. Many Americans know little about this country beyond war images from the 1960s and 1970s. In 2005 NAR published an article on the Vietnamese real estate market that highlights the dramatic changes in the market economy since the Vietnam War. Even since the 2005 article, the country has attracted significant foreign investment. The Ministry of Planning and Investment (MPI) reports a GDP growth rate of 8.23% in 2006 and 8.4% in 2007. While not immune to the current economic crisis and realizing a slowed growth rate for 2008 with GDP projected at 6.5 - 7%, MPI projects a stabilizing economy in 2009 and to regain growth impetus in 2010. REALTORS® working with investors with an eye on Asia will have greater opportunities come January 1. Learn more about this growing market, including tips for conducting business.


GLOBAL MARKETS

Middle East Begins to Feel Global Pinch
Dubai's long, lucrative property boom is hitting rough times, with property-flipping speculators and hopeful foreign buyers increasingly worried as oil money and quick profits dry up, according to a Oct. 27 Associated Press article. While it's not clear if the bubble has burst or if the market is simply cooling, it appears the Middle East is not immune to world's global economic crisis, as some believed. The region still enjoys an immense liquidity at their disposal and some analysts say that the demand remains strong for completed property but interest in unbuilt or incomplete property appears to be drying up. Colliers International, Morgan Stanley and others have reported actual or forecasted slowdowns in Dubai and other GCC markets. Investors who bought in hopes of double-digit annual returns are now looking simply to cut their losses on unfinished properties. Banks in Dubai, like elsewhere, have been forced to tighten the rules on loans as they seek to spread their resources as much as possible. All this at a time when the United States is courting investment from sovereign wealth funds as it grapples with the impact of the global financial crisis on the economy, Deputy U.S. Treasury Secretary Robert Kimmitt recently did a five-country swing through the Gulf Arab region to drum up investment for the ailing U.S. economy. Kimmitt called for open investment policies and warned against protectionism, although the U.S. continues to look closely at sovereign wealth fund investors to ensure that no security concerns are raised.


Immigration Slowdown in the U.S.
Although the foreign-born population in the United States (12.6%) is at its highest since 1920 (38.1 million), the influx has slowed along with the U.S. economy. New U.S. Census data shows that the number of new immigrants to the U.S. fell from 1.8 million reported in 2006 to 511,000 in 2007; nearly half of the average 1 million that have been entering the U.S. every year since 2000. The U.S. economic downturn, along with the government's crackdown on illegal immigration, is seen as the cause. The 2007 Census revealed that the foreign-born population fell in 14 states, including New Jersey which has historically been one of the top states of foreign-born citizens. Declines were also recorded in the key cities of Atlanta, Las Vegas and Oakland, Calif.; although the numbers increased in Phoenix, Boston and Denver. Among the largest 20 U.S. cities, Miami and Los Angeles have highest percentage of foreign-born, while St. Louis has the lowest. About 12 million people (31% of all foreign-born residents) were born in Mexico. A prolonged decline in the number of foreign-born residents would have a significant negative impact on the U.S. housing market. Southern Florida is already feeling the economic impact due to a decline in the number of foreign visitors. Latin America represents the largest source of immigrants (53.6%) followed by Asia (26.8%) and Europe (13.1%). To most effectively target and service the foreign-born market, REALTORS® need to understand this population. Read or download Immigrants in the United States, 2007; A Profile of America’s Foreign-Born Population from the Center for Immigration Studies.  


BUSINESS RESOURCES

NEW International Events Newsletter
A new monthly NAR International electronic newsletter was launched in September featuring global industry events. Many of those featured are NAR-sponsored or -supported. The eNewsetter is free to any NAR member and you can subscribe through REALTOR.org. Go to "My Account" at REALTOR.org (prompts for log-in), and then go to "Manage Your Email News Subscriptions." From there you can select from a wide range of topics for information to be pushed out weekly or monthly. Make sure you're not missing global business development opportunities--sign up today!


Missed the NAR Convention?
For those not able to attend the 2008 REALTORS® Annual Convention in Orlando earlier this month, you can catch up on some of the international highlights online. General information is available at the Convention home page. The international program track included a session with NAR Chief Economist Lawrence Yun on the global market and opportunities for REALTORS®. This program, along with a series of market interviews with practitioners around the world is covered in a NAR press release. Also, find out who NAR's newest bilateral partners are from Europe, Asia and Latin America, bringing the total to 81 alliances in 59 countries! Watch for more international highlights to be added to the NAR International home page.

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


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