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Long term property investors are too cautious and could be missing out on fortunes

The worldwide property price corrections of the last 12 months present a swathe of opportunities for cash rich individuals, companies and funds and also the chance to have more control over the length and depth of the downturn, according to investment experts.

'The best way to predict the future is to reinvent it. The old adage that investors are just a bunch of sheep is not too far wrong. There are a whole series of people who take what's out there in the landscape and refuse to believe it,' said Joe Valente, head of portfolio management and strategy at Allianz Real Estate.

Valente said property prices would continue to fall for at least another year but long-term investors should consider buying now if they want to fully exploit a repricing that has so far slashed around a third off commercial real estate values in Britain, the market broadly seen as most advanced in its correction.

He said global real estate markets were always prone to swings in sentiment which led to irrational pricing and that the current bout would continue to unwind over 2009 and 2010.

'At each point in a market cycle, there's a new emotion and with each new emotion, pricing moves. London is somewhere between despondency and depression and should be the first out of the recession,' Valente said, adding that he felt Paris and Germany were still in denial.

Tim Bellman, global head of research and strategy at ING Real Estate said he believes that the global property markets should touch bottom in 2009 and there is potential for positive growth in 2011 and 2012.

'By 2010, the capital value decline by and large should be behind us. Around the world we would expect retail and industrial property to perform slightly better and recover slightly sooner,' he added.

Continental Europe and parts of central and Eastern Europe are the more defensive places for investors to park cash in the near term, largely because of a tight supply pipeline that would promote strong rental growth when economies bounce back, he said.

He said he regards the Asian property markets as having greater downside risks because real estate prices in parts of the continent tended to double and halve at the drop of a hat, particularly in Hong Kong and Singapore.

By 2010 Britain, France and Japan followed slightly later by Germany, Canada and the Netherlands would have experienced corrections sharp enough to create an appealing risk premium between property yields and government bonds.

'The opportunities that will emerge over the next 12 to 18 months will be career-makers. It will be a time where reputations and fortunes will be made,' he predicted.