Global markets lurch

The dramatic shifts taking place in the global second-home market gives a picture of turmoil, making it difficult for property investors to know where to put their money.

Some countries are rubbing their hands with glee as investors turn away from Europe while others believe the problems are exaggerated. Comments from global players mirror the general ups and downs.

Those benefiting include South American and Asia. 'When the real estate market in Europe is not good, it's very good for us,' said Daniel Rosenthal, director of events for Eugenio, a Brazilian promotional company.

'We're seeing people taking equity out of established homes in Europe and the U.S. and moving it to the far east,' said David Walton, marketing director of Siam Royal View, a Swiss-owned company developing projects in Thailand.

There are also indications that some markets are still in the midst of an upward cycle. High-end apartments in Russia are selling at about $25,000 a square meter, or about $2,336 a square foot, compared with the $7,000 or $8,000 a square meter found in many of the world's large cities, according to Alex Romanenko, president of the Advecs real estate company and the Russian Guild of Realtors.

But there are plenty of signs that the oft-discussed woes of the U.S. and European financial markets are having a serious impact around the world. Building is slowing down in the hardest hit areas.

'There's a lot less new construction starting in Florida,' said Teresita Bersach, residential president of the Realtor Association of Greater Miami and the Beaches.

Florida is not alone. Due to tightening credit and an oversupply of luxury villas, many markets in Europe are taking a breather from second-home building, claims Tobias Just, an analyst with Deutsche Bank.

'We expect residential construction activity to come down significantly in Europe', Just said. He warned that recent increases in Eastern European markets like Bulgaria, Russia and Croatia were 'unsustainable.'

Several Spanish builders, including Grupo Mall, Grupo Euroempresa and TM Group, are now promoting new developments in places like Mexico and Panama. Madrid-based consultancy Hi Grupo is marketing its investments in Hungary and Romania, and claiming Bucharest is the next second-home hot spot.

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