Booming property markets not likely to help global economy

With so many different property markets emerging around the world, the news that property as a whole is expected to have a bad year is somewhat disheartening.

The property market in the Middle East is getting stronger with each passing day and many Asian property markets are starting to emerge as viable alternatives to the Middle East. In addition to that, many markets in Africa are also starting to look very attractive and with property markets in South America also starting to gain some momentum, it would seem that the world has a number of different markets to counteract the effects of property downturns in the United States and the United Kingdom.

Well, as it turns out, when the US and UK property markets sneeze, the rest of the world is forced to wipe their face.

In France, one of the European property markets that have managed to stay strong despite events in nearby England, there is now widespread fear that the shift from stocks to property will create a property market bubble that will burst with the same enthusiasm that the sub-prime crisis created within the United States. Because the situation in France was directly caused by the situation in other first world nations, there is little reason for analysts to conclude that the same could not happen even in the developing property markets that investors are now looking to for comfort.

The overall picture is quite grim however, as projections based on activity in January as well as comparisons to previous years now place the worldwide investment in property markets at being lower by 17% in 2008 than it was in 2007. This would in fact see property investment worldwide go from a record-breaking high in 2007 to a multi-year low in 2008 and that is something that leaves many property market analysts with grim expressions on their faces.

The one consolation that can be taken from that news is that with market volatility at a point much higher than it has been in recent years, projections become less reliable. So, while it might turn out that investment does not sink that low in property despite the good performance of emerging property markets, it might also turn out that investment sinks much lower.