Asia leads the top spot for global property market recovery

In terms of a global property market recovery Asian countries are leading the way with government stimulus plans largely credited with helping the real estate industry rise from the ashes of the world economic crisis.China and Singapore have both seen soaring property prices in recent months. Along with India and Vietnam, these markets appear to have been boosted by governments eager to improve economic growth and recognising that foreign investment and the real estate sector are vital.

But for private investors buying in these countries is not always an option so they need to look to locations that openly welcome foreign real estate buyers such as Australia and Brazil.

Also with statistics indicating that property prices in both the UK and the US are bottoming out, investors seeking bargain prices are helping a recovery in two of the worst hit real estate markets.

On a global basis there are still places to avoid and these might include Dubai because of its high interest rates, Bulgaria simply because even although prices have plummeted no one wants to buy so an exit strategy for investors doesn't exist and Thailand where political unrest could still rear up again.

Spain is one of these countries where a high risk strategy might work. Prices have plummeted but there are signs that at the luxury end of the market bargain hunters are buying. However, like Bulgaria there needs to be an exit strategy and few analysts believe that a recovery is likely in Spain in the next 12 months.

But Spain has a property market that has been extremely popular with foreign investors and when it does turn then there is likely to be plenty of buyers for those who want to sell.

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Property sales in China surged 60% by value in the first seven months of this year as record lending boosted the real estate market. The latest published figures from the National Statistical Bureau show that sales accelerated 53% in the first half of 2009.

Residential property prices in 70 major cities increased 1% in July from a year earlier, the biggest increase in nine months, the National Development and Reform Commission said.

Analysts agree that Premier Wen Jiabao's 4 trillion yuan ($585 billion) stimulus package, record loans and stronger investment are all working and promoting economic growth. 'As developers run down inventory rapidly they will soon start to buy land and increase spending again,' said Frank Gong, chief China economist and strategist at JPMorgan Chase in Hong Kong.

'Property investment, which accounts for 10% of China's GDP and is a trigger for growth in related sectors, will become a strong driving force in China's recovery,' he added. Home prices in China will rise 20% by the end of 2010, according to Eric Wong, an analyst at UBS AG. And a report from Stanley & Partners Investment Management says that Shanghai's property market will probably be the strongest in the country with residential prices up as much as 20% over the next year.

Residential property sales in Singapore have soared, reaching a record high since the country's Urban Redevelopment Authority began recording figures. The latest data shows there were 2,767 real estate units sold in July this year, the highest monthly sales volume since records began in 2007. This followed another record month in June when 1,825 units were sold. Property sales rose by 51.6% from June to July, a year-on-year increase of 206.8% in sales volumes.

Analysts say that the astonishing improvement in the country's real estate market is due to developers not being greedy and property investors recognising that the middle and luxury markets are competitively prices.

Property consultants CB Richard Ellis are now predicting property sales in 2009 to exceed the market peak of 14,811 sold in 2007.

Real estate sales in Vietnam, especially beachfront properties, are booming with international investors so eager to buy that some sold out before even a brick is put in place. Research from property consultants CB Richard Ellis shows that an astonishing 70% of beachfront villas with price tags of up to $1 million are bought before they are completed, a scenario that has not been seen in world property markets for some time.

More than 8,200 beachfront villas and apartments are due to be built over the next two to three years with the majority likely to be bought by property investors. CBRE general director for the region, Marc Townsend, said only a small number are being bought for personal use.

Foreign and local investors have staked their claims, walling off areas of the beach in preparation for development, even though some sites remain little more than sand-blown scrub beside the sea. Some are talking in terms of the area becoming the new Bali.

The government in India wants to make it easier for foreign property investors and in particular for them to put their money into projects that relate to the hospitality sector and tourism.

It is currently looking at changing the rules to allow overseas investors to be part of smaller real estate projects. At present they are limited to investing in projects that cover a minimum of 25 acres.

Sales from the country's major developers more than trebled in the second quarter of 2009 compared with the first three months of the year. Developers are so confident about a recovery in the property market that they have lined up around 60 million square feet of real estate launches this year, more than double last year.

Brazil has overtaken China as the second best location in the world for property capital appreciation, according to the Association of Foreign Investors in Real Estate which has published a mid year annual survey for the first time ever in order to help investors keep up to date with a fast changing global real estate market.

Regarded as the official voice of the foreign investment industry in the US, its survey shows that not only has Brazil replaced China but it has entered the top ten capital appreciation investment destinations for the first time. The US still takes the top spot.

Like many emerging property markets Brazil does not publish official real estate figures so it can be hard for potential investors to gauge what is happening. According to analysts at property investment company Obelisk International investors have been quick to recognise the potential offered in Brazil which has several prime areas for property investment including the popular north east region where luxury properties are priced at a fraction of what you would expect to pay in an equivalent resort in Europe.

Indeed, savvy investors who entered the market early on have already seen excellent capital appreciation, according to the AFIRE survey and this trend is likely to continue, according to the Association for the Real Estate and Tourism Development in northeast Brazil.

The 2014 World Cup is widely expected to attract further investment and tourism. In preparation the Government is spending $250 billion over the next six years on airports, roads, sanitation and hydroelectric power.

Australia has largely escaped the worst ravages of the global property downturn and is one of the first established real estate markets to recover. Residential property prices in Australia's largest cities could rise by up to 19% in the next three years, according to the latest analysis from economic forecasters BIS Shrapnel.

Its Residential Property Prospects 2009 to 2012 report says that low interest rates, high rents and housing shortages are evident in most markets and investors will take over from first home buyers toward the end of 2009 to keep demand for residential property going.

'By the end of 2009, strong turnover of the most affordable properties will be flowing through into the bulk of households positioned towards the middle of the market, as people who have sold their existing dwellings to first-home buyers upgrade to their next home,' said senior project manager Angie Zigomanis.

BIS Shrapnel estimates that the media house price in Sydney could rise by 19% while other cities are expected to see price increases of at least 11%. Perth is expected to experience prices increases of 12%. On the Gold Coast, the Sunshine Coast and Cairns prices could rise by 14%.

A sustainable real estate recovery is underway in the US according to the National Association of Realtors. Indeed, its latest figures show that the number of existing properties being sold increased 3.8% in the second quarter of this year one of the most encouraging signs since the property crash.

The quarterly rise pushes the seasonally adjusted annual rate to 4.76 million units up from 4.58 million units in the first quarter of 2009, although the NAR also points out that median prices remain well below last year's levels.

However, low interest rates combined with higher affordability as prices decline, will continue to drive sales, which present a 'hopeful sign', according to Lawrence Yun, NAR's chief economist.

General opinion is that residential property prices are soaring beyond expectations in many markets in the US with analysts and market observers talking about a growing confidence in the real estate sector.

But the question remains whether the trend will continue through the approaching winter and the expected seasonal downturn. Buyers in the US tend to retreat for winter and remain on the sidelines until February, when volume usually picks up again.

Another positive sign is an increase in foreign property investors in the US, many keen on buying what they regard as bargain prices foreclosed properties. It is foreign investors who want a holiday home or to invest in the long term that are pushing the market forward in Florida, according to a report from Gerson Lehman Group.

Like the US, the UK real estate market is showing tentative signs of recovery although experts point out that small increases in transactions and prices mask the fact that sales and prices are at record lows.

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After small increases since the start of the year residential property prices in the UK actually fell 2.2% in the first half of August as the traditional summer slowdown affected the real estate market.

The latest monthly figures from property website Rightmove are regarded by some as a simple seasonal blip and there is general optimism in the market. The industry points out that it is a lack of lending that is preventing a general recovery.

'After several months of activity and prices revving upwards from last winter's low point, both will start to hit the limit without more mortgage finance. In spite of pent-up demand, the market and pricing is boxed in by restrictive lending criteria put in place to ration mortgages given the lack of funds available to lenders,' said Miles Shipside, commercial director at Rightmove.

And he added that market sentiment is improving with 75% of home owners indicating that they do not expect prices to fall in the next year. This is backed up by the latest research from the Royal Institute of Chartered Surveyors which shows that some 8% more chartered surveyors expect prices to rise rather than fall over the next three months, the highest reading since April 2007.

But it too is critical of the lack of lending. 'Although demand for property is continuing to rebound, it still remains low from a historical perspective. If mortgage availability remains insufficient to meet the increase in buyer demand, then it is possible that prices may slip back again especially if unemployment continues to rise and mortgage rates increase,' it said in a recent report.

To conclude, the top five best investment spots are present are Asia, Brazil, Australia, the UK and the US. But the days of rampant speculation are well and truly over and real estate just isn't the kind of market where a fast buck can be made.