Knowing — or maybe believing is a better word — that property markets and economies around the world are on the way back up sure is a nice feeling. It may be a short-lived feeling, because according to some there are signs that the short-lived positivity will end as quickly as it begun.

I am not one of the people. Nor am I one of the plastic fantastic optimists that think the only way is up, and that rejoices in reports of UK mortgages doubling, and property in some areas selling for almost the same as it would have at the height of the boom.

The truth is, yes, we are making some headway against the deluge of negative financial news. In fact, a good analogy of the current recession recovery process for me, is a snow plough that has been completely submerged in snow: we have just jumped in and managed to get the engine started, the heat is slowly melting the snow, but we still have a hell of a lot of pushing to do before we clear the drifts.

As you would expect, all the countries of the world are recovering in different ways and at a different pace, depending on the makeup of their economy and the funding and direction of its government’s economic stimulation policies. Nobody knows how strong the recoveries are without the massive injection of cash and stimulation being poured into the world’s markets.

In this series of articles we will profile the G8 nations to track the progress of recovery in their housing markets so far, and attempt to map any possible deep-drifts in the road of stimulus withdrawal ahead.

Part I: America

In the last few months, the positive data has been rolling in on the American housing market; price increases, rises in new home starts and rising transaction volumes, including a somewhat astonishing 10.1% increase in home re-sales between September and October.

However, like with every almost everywhere, everything can be put down to the low interest rates and government incentives to buy a house and generally spend money. The tax incentives for first time buyers has just been extended to April, at which point the housing market will have to stand on its own two feet — unless it is extended again. Many analysts think this could spark the end of price rises and a restart to depression.

A good sign however is in the recent data from the automobile industry. It has been doing well because of the government cash-for-clunkers scheme. The scheme ended in October, yet analysts surveyed by Bloomberg still forecast a year on year rise in automobile sales for November. The analysts surveyed by Bloomberg have not been wrong in any article I have read so far.

This will instill hope that the foundations of recovery have been laid by the stimulus, and that the slow recovery can continue after it is removed.

However, the housing market is reliant on credit conditions easing, and on employment rising, or at least stopping falling, and also on wages rising.

There are currently thousands of US homeowners falling into arrears and likely to be repossessed if they cannot find a job soon. There are many more thousands only able to continue paying their mortgage one or multiple salaries or income-flows down, because of the record low interest rates. These too will likely face repossession when the government starts putting interest rates back up.

Such major increases in supplies of cheap properties, will almost certainly turn the price rises into falls when the government stimulus ends — if not before from the first group.

The number of potential repossessions will begin to fall as soon as the labour market starts to improve.

This of course will be helped by a de-restriction of the mortgage market, so that people can refinance for better deals.

What we also need to see is a significant increase in demand, which will offset the damage done by the repossessions. This will again rely on significant increases in the availability and security of employment and the availability of finance.

Spot a pattern here? Yes; the future of the US housing market post-stimulus relies on a significant increase in the availability of finance and jobs.

The availability of finance is gradually improving as the world stock markets become more profitable. But even the availability of finance is hindered by the labour market; the amount of finance the banks will provide will always be determined by the deposits and loan repayments people are making, which will of course grow as the labour market improves.

So, really it all relies on the labour market. Unfortunately unemployment is still rising. The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983. The government is determined to turn this around as soon as possible though.

The figures prompted Obama– having recently signed a bill extending jobless benefits — to promise new measures to find jobs for some of the 15.7 million unemployed Americans.

“My economic team is looking at ideas such as additional investments in our aging roads and bridges, incentives to encourage families and business to make buildings more energy efficient,” additional tax cuts, and more steps to ease the flow of credit to small business and promote exports, he said in a recent statement from the White House.

In fact it was also the rise in unemployment in October that led to the extension of the tax incentives for first time home buyers; it wasn’t for the housing market it was for the jobs it holds and may create.

So, it is the job market we must all be watching. If the government incentives can successfully bring sufficient recovery to the economy that employment starts rising before April, then maybe the housing market will be able to hold on long enough to survive till recovery proper without any further falls.

This article written by Liam Bailey of Property Abroad.com

Regular readers to the site will know that this is the next installment in a series of articles giving how to tips on buy to let property investment abroad, the first covered the potential pitfalls of buy to let investment abroad, and the second covered the potential pitfalls of buying off plan property overseas.

This one covers the next step in the process; after you have researched your market, researched and bought your property, here are 5 tips on finding good tenants, including some tips on vetting tenants, all from professional buy to let landlords.

1: Put yourself in the Tenants Shoes, and think like them

This really comes down to knowing your target market; if you want to rent to students then you will want to advertise in the university. If you plan to let to locals then an ad in the local press is probably a good idea. You will also want to have a to let sign created, as many people drive around the area they wish to live or move to.

2: Speak to Several Local Letting Agents

This is the best way to find out how to find tenants for your buy to let property abroad. It is also a really good way to learn about the local rental market: rental rates, is rent payable in advance, does the tenant pay the administrative fees etc etc. However, you should already know some of this if you have done your research before buying correctly.

3: Speak to Local Hospitals

Most hospital staff will be very helpful in telling you whether or not your property is in their catchment area. Also advertising in universities and hospitals is always very cheap and generally very effective.

4: Know the Market

In many overseas markets (especially the less developed, eg. Central Eastern Europe, and, I imagine, many other regions in the world) you can’t really do much of tenant vetting, because it’s not usual to check any references or credit score the potential tenant. Because it is unheard of to do so, the tenants will laugh in your face and you’d never let your property if you tried to do so. So you need to know what the market supports and what not, and adjust yourself to it.

5: Hire a Local Letting Agent – Where Possible

As long as it is not going to cut into your cash-flow too much; hiring a letting agent is a very good idea to let a property abroad on a residential basis. Agents will be best placed to re-let a property quickly if a tenant leaves, and will also make your life a lot less worrisome about what you are going to do if your tenant doesn’t pay the rent, and about the state your property is being kept in.

Hiring a local letting agent will also save you from having to worry about vetting tenants, because they will do it for you. They will also do it a lot better than you.

Many thanks to Petra Gajdosikova and Dawn Gray, the professional landlords who assisted in this article, written by Liam Bailey of Property Abroad.com.

Having been dropping like a stone thanks to the global economic crisis, Dubai property prices have finally risen again, according to real estate consultancy Colliers International – by 7% in the third quarter. This is the first rise since the emirate’s property market crashed at the end of 2008. Investors who bought during the boom will not be dancing in the streets just yet, though, as this rise still leaves prices around 50% down on their pre-crash level.

Prices over the whole of 2009 are still 47% lower than that peak level, and are actually now the same as they were in the second quarter of 2007.

Colliers International’s quarterly price index collates mortgage transactions on properties open to foreign ownership, and it showed that prices between July and September 2009 rose by 7% from the second quarter, from their peak level which was enjoyed in the third quarter of 2008. This 7% increase coincides with a rise of 64% in property transactions during the third quarter, which shows that some confidence is returning to the market, and perhaps that investors and buyers are making sure they act now before the market recovers even further.

Colliers International regional director in Dubai, Ian Albert, sounds a note of warning, however, describing this third quarter rise as a “bounce” and advising that people wait for fourth quarter results before deciding that an upward trend may be happening, and that a recovery is truly in progress.

The figure of 7% equates to an increase from 949 United Arab Emirates dirhams per square foot in the second quarter to 1,016 dirhams ($278) in the third quarter. Broken down a little, the 7% rise is made up of a 6% increase in the price of apartments, a 9% increase in the price of villas, and a 7% increase in the price of townhouses.

Colliers put the rise in prices down to a more widespread availability of mortgage financing, and a belief amongst the expatriate community of workers in Dubai that job security is improving. The consultancy firm thought that the effect of new units coming onto the market in 2010 may serve to keep any further rises to a minimum, as supply will continue to outstrip demand. Many construction projects were put on hold, but as the economy slowly improves these will resume and new properties will become ready for sale. Colliers’ Ian Albert added that “certain tier one developments will offer investors oases of performance, predicated upon a return to fundamentals outlook”.

Photo credits: octal & joeburger via flickr

The Hong Kong Monetary Authority, the city’s central bank, last month imposed tighter mortgage restrictions, which Hong Kong Chief Executive Donald Tsang said were to stave off a big property bubble following soaring prices this last year. He told attendees at a business lunch: “We do not want to see a huge property bubble developing in Hong Kong,” having earlier said that he wasn’t sure whether a bubble was forming or not.

The action taken by the HKMA was on October 23rd, and it cut the mortgage limit from 70 percent of the property’s value to 60 percent, on property worth HK$20 million (US$2.6 million) or more. For properties below that figure, the 70 percent ratio stayed in place but the HKMA capped the maximum loan amount at HK$12 million.

Tsang did try to reassure people, however, by suggesting that this present surge in property prices did not show the same signs of speculative behaviour that preceded the bursting of Hong Kong’s property market bubble back in 1997, which resulted from the Asian financial crisis.

He was tight-lipped on whether there were any other plans afoot to keep property prices under control, only saying that the government did have the necessary tools at their disposal, and that any action taken would be prompted by the need for stability, transparency and smooth market operations. One method could be to make more land available for residential property development, which is something the government said last month it is already considering. This would be done through auctions and would mainly concern derelict buildings left over from Hong Kong’s manufacturing days.

However, when Tsang met the city’s property developers last week to discuss the rising property prices, they told him that the government should release land at more reasonable prices than in the past, because developers have to agree to pay 80 percent of the site’s recommended price before the auction can go ahead.

Despite the global recession, prices of Hong Kong’s mass-market residential property have leapt more than 20 percent in 2009, and luxury property prices have gained even more, jumping 40 percent. This latter surge is the result of an excess in global liquidity, and a fresh influx of cash from mainland China where there has been a big increase in the number of wealthy Chinese.

Real estate agents have said that property transactions have fallen since the cut, but analysts have pointed out that because many mainland Chinese buyers of luxury property in the city buy with cash, mortgage measures may not do much to calm the luxury sector.

Photo credits: tangysd via flickr

West Side Village is a gated community of over 686 apartments in the prime location of Hurghada’s city centre. Hurghada is Egypt’s, and one of the world’s fastest-growing property hot-spots, situated on the increasingly popular Red Sea Riviera.

Overview

West Side Village is designed for all-year-round living, not just as a holiday resort. It offers the option of studios, one and two-bedroom apartments, and it is set in over 44,793 square metres of tropical, landscaped grounds, only a third of which is being built on. It has its own restaurants, cafes, bars, a health and beauty centre, three communal swimming pools, tennis courts, parking, twenty-four hour security, and on-site management.

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Location – Hurghada

Hurghada is the largest resort in Egypt with a population of 35,000. Located on the western banks of the Red Sea, it used to be a small fishing port, but it has now become a great place to enjoy two of the world’s fastest-growing sports – diving and golf.

A few moments outside the gates of West Side Village there is a new beachfront promenade that stretches for 8km, with bars, cafes and shops, making it perfect for a leisurely walk during the day or in the evening. The beaches are wide and sandy and lined with palm trees, truly making Hurghada a paradise for sun-worshippers.

Hughada town has every modern facility the visitor or full-time resident might want. There are banks, internet cafes, business centres, hospitals, international schools and supermarkets.  Further south is the city of Sahl Hasheesh, once known as the City of Isis, who was the Goddess of motherhood, magic and fertility. This area is set to be transformed by 2014, as there are plans to build twenty hotels (one of which will be a seven-star), eight golf courses, and a world-class marina designed by Lord Norman Foster. There will also be high-end retail centres and cinema complexes.

Prices & Availability

• Studio with Terrace, 44.37 SQ. M from £25,948
• One Bedroom Apartment with Terrace, 55.33 SQ. M from £32,357
• Two Bedroom Apartment with Terrace, 118.26 SQ. M from £69,159

Prices start from sterling £25,948 for a 44.37 sq metre Studio, and up to £84,864 for the two-bedroom apartments. Penthouse apartments boast a private roof terrace with panoramic views over the beautiful Red Sea Riviera. Easy payment terms are available on all these properties. This means a 10% deposit, a 30% payment on exchange at 28 days, and the remaining balance by interest-free payments. Phase 2 has just been released for purchase at Phase 1 prices, but these will be increasing in the next few months.

Contact Us

To take advantage of the Westside Village lifestyle, please use the following form to receive more information.

[contact-form 35 "Westside Village"]

South Florida property developer Joe Milton has put up $100 million of his company’s cash to set up a mortgage company to fund loans for foreign buyers, because foreign buyers are often locked out of the market if they don’t have cash. Although sixty percent of Milton’s buyers are foreign, the few loans that are being made to foreign nationals come with terms deemed unacceptable by most. However, more than half of these foreign buyers are paying everything in cash, with European and Canadian buyers most likely to reject the financing option.

Since the global economic crash, South Florida’s booming property market has been in meltdown, and foreign investors have been taking note of this. The weak dollar is also giving them good reason to take a look at South Florida property. In many areas, residential real estate is now selling for less than half of what it did at its peak. The Florida Association of Realtors reported that the average home price in Miami-Dade fell to $190,900 in September, which is a 30 percent fall compared to a year ago. The average condo price fell to $132,900, a drop of 37 percent.

Europeans are big buyers in South Florida, with Swiss, Spanish, Italians and English all seeing it as a good time to buy. They account for 26 percent of foreign buyers. But it is the Latin Americans who are the largest contingent, making up 52 percent of foreign buyers. Walter Defortuna, chairman of Fortune International Realty, said that for the first time in his 30-year career it’s cheaper to buy an apartment in Miami than in a major Latin American city such as Buenos Aires or Mexico City. "We were always two to three times more expensive than them, and today we are cheaper. They perceive that, no question," Defortuna said. He also added that these new buyers are more interested in a long-term investment, not the short-term gain. American real estate agents are conducting investment seminars in major Latin American cities with the aim of spreading the word about the affordability of South Florida property.

South Florida’s appeal has always been strong thanks to its beachfront lifestyle and the diversity of nationalities that have made it their home. The Miami-Fort Lauderdale-Miami Beach area is especially popular. A July survey conducted for the Florida Association of Realtors found that almost one in four foreign sales in Florida this year took place in that region.

Photo credits: exalthim via flickr

A worrying trend appears to be emerging in Ireland – overseas ‘property investors’ seem to be walking away from their foreign property investments in their droves.

People who bought during the boom years are now finding the value of their properties has slumped to the point that they are having to simply hand their keys back to the bank and walk away. Some of these individuals have not even been able to enjoy a single day in their foreign homes because they were bought off-plan, meaning they paid their money on the basis of a projected building yet to be built on a certain plot of land. Now these projects are nearing completion and the final staged payments are becoming due, property owners are realising they have already paid two or three times what their investment is now worth, without even adding in this final payment.

Many Irish investors had to re-mortgage their Irish homes to make their dream home in the sun a reality, and foreign property lawyer Tom McGrath has said his firm is being bombarded with enquiries from people in financial difficulties. These investors are now unable to complete their purchases and are not able to secure the return of any deposits already paid. One of the places worst-hit is Bulgaria, where many investors were duped by the promise of rental guarantees for the first two years of ownership, little realising that this amount had been added into the purchase price. Thus, builders received above the odds for their properties and would simply have had to pay back that excess to the customer in the first two years following completion.

John Mulligan, who was formerly involved in selling overseas property, has written a book on the subject called ‘No Place In The Sun’. He says that between 50,000 and 100,000 Irish people bought properties in Bulgaria between 2000 and 2008, typically paying €120,000 for apartments that are only worth €40,000.

This same situation is happening in other parts of the world. Dubai, Turkey, Portugal and Spain are all seeing similar problems, where investors were caught up in the overseas property frenzy. Even where investors have the funds to complete the deal, there can still be problems because many building companies have had to fold, meaning construction projects have been halted. This leaves property owners with nothing more to show for their money than a building site sitting quietly in the sun.

Back in September, we blogged about TweetLister a new and innovative real estate listing service that list properties for sale and rent via the micro-blogging platform – Twitter. Quite a lot has changed at TweetLister since our last feature. So we asked Lloyd Chrein (pictured on the right), a founding Partner at TweetLister.com to update us about these new changes and share a few thoughts about TweetLister and he was kind enough to oblige.

Could you explain how Tweetlister works

TweetLister is a tool developed specifically for posting, scheduling and managing real estate listings on Twitter. At the core of what TweetLister does is a simple form that turns property listing information into a clear, straightforward tweet. Each tweet includes the listing information (bedrooms, baths, square footage, price, features, etc), a link to a detail page on TweetLister, and a searchable hashtag. Listings not only appear on Twitter, but they can also be found using TweetLister’s Search Listings tool, which allows you to locate listings according to specific requirements and keywords.

Surrounding TweetLister’s simple “Add a Listing” tool are useful features designed to help to turn clicks into deals. These include enhanced detail pages, agent bio pages displaying contact information and current listings, and reporting tools that allow members to track and download clicks and contact information. Members can post and tweet an unlimited number of listings, and they can associated an unlimited number of Twitter accounts – allowing them to post different listings to different Twitter account timelines (for example, many agents have specific Twitter accounts for different neighborhoods, or different types of properties they represent). And members can place their own text-based Vendor Ads on their listing detail pages, creating a potential profit center for realtors and property owners.

TweetLister recently created a partnership with ListHub.net, one of the largest Multiple Listing System (MLS) syndicators in the US. This not only placed nearly 1.5 million active listings into our search system, but it made it possible for more than 300,000 listing agents in the US to “claim” their listings in TweetLister. When they register, they select their MLS from a dropdown list and enter their Agent ID number — and their listings are automatically placed into their account, converted to tweets, set up with enhanced detail pages — and ready to schedule to post to their Twitter accounts.

TweetLister is a one-stop, professional-grade tool for realtors and property owners, allowing them to tap into the marketing power of Twitter — and making the process simple, fast and effective.

How did come up with the idea of mashing up Twitter with real estate listings?

TweetLister was a natural outgrowth of what we do every day — we build and market web solutions, primarily for members of the real estate industry. We’re also consummate entrepreneurs — we’re always looking for a way to build a better mousetrap, and to fill a need. With the continued growth of Twitter, and the buzz in the real estate world that it is a great way to market, we saw a two-pronged opportunity: to build a tool that would demystify Twitter and make it accessible to realtors of all levels of technical sophistication; and to create an online business that could be marketed effectively and inexpensively — using social media. We believe we succeeded on both levels, as the real estate community has embraced us as THE Twitter tool for real estate, and word has spread virally to all ends of the globe.

Have you been involved in any other Web 2.0 projects in the past?

Yes. We’ve been around the block more than a few times — with our clients’ projects and our own. Our latest was a site called ClickSprout, which began as a turnkey tool for search engine optimization, and has now morphed into a custom solution business that creates optimization strategies for businesses of all sizes.

What is the current take up? How many realtors have signed up to Tweetlister?

We have thousands of users, and the potential to serve hundreds of thousands instantly through the ability to claim MLS listings.

Does Tweetlister appeal to a predominantly U.S market?

TweetLister currently appeals to any real estate agent who wants to promote property listings on Twitter. We are already working on developing TweetLister in other languages to accommodate various countries that have shown real interest in using our service. Some of our earliest users were from overseas, and we continue to speak with large brokers and listing providers in other countries regarding feeds and partnerships.

Does Tweetlister also target international real estate? What percentage of total listings are international?

Due to our recent partnership with ListHub.net, we now have up to 1.5 million listings mainly in the U.S. Outside of that feed, however, we have thousands of international real estate listings. The percent is now very small compared to our overall number of listings. We are in contact with several international listing aggregators and MLS services to introduce TweetLister on a wider scale internationally.

What is the most popular country outside of the U.S on Tweetlister?

Currently, Thailand has the most listings on TweetLister of any country outside the U.S. Beyond that, Australia, Canada and Portugal rank high.

Does TweetLister pose a threat to more traditional real estate listing sites like Trulia and Zillow?

TweetLister is not in direct competition with sites like Trulia and Zillow. These sites are buyer-centric and TweetLister is agent/seller-centric. We offer a tool to help agents and property owners automate the process of managing their listings on Twitter, while these other sites primarily offer buyers a wealth of information on properties.

Are there any upcoming updates on Tweetlister?

We are constantly working on feature upgrades and future updates to our service. Members can rely on a steady stream of improvements that keep pace with changes and trends in social media, and that add useful, effective functionality to our service.

I noticed there are no ads on Tweetlister at the moment – how to you intend to monetize TweetLister?

In early November, TweetLister switched from a free model to a paid subscription model. TweetLister is now available for only $9.95 per month, including the ability to claim your MLS listings and add new listings of your own. We do place small ads on “unclaimed” MLS listings. Meanwhile, TweetLister members can place their own text ads on their listings — creating a potential profit center for realtors and property owners.

Would you be offering XML feed upload support to automatically add listings to Tweetlister?

Through our recent partnership with ListHub.net, we now have a feed of up to 1.5 million listings in the system that can automatically be claimed by the listing agent, simply by signing up for TweetLister. In addition, we can also accept XML feeds in the RETS standard from those who do not have listings in ListHub. We currently have minimum size requirements on feeds, but this will change as we continue to grow. Those interested in supplying a feed may contact us at info@tweetlister.com.

How do you prevent overloading and spamming Twitter with masses of Tweets advertising properties?

Our tweets go to the user’s Twitter account. So we are not spamming at all. Individual users are simply using our tool to post relevant content to their own Twitter timelines. In the Help files and FAQ items on our site, we try to instruct users on proper “Twittiquette”, which includes mixing up your listing tweets with other informational tweets — so that your Twitter timeline is more than just a selection of listings. We make sure to keep up with Twitter user trends and we listen to feedback from our members and from the broader Twitter community, and we plan to continue to pass this knowledge along to our members.

Twitter is a text only platform; how do you intend to bridge to gap between picture oriented real estate listings and text only Twitter?

We have already bridged the gap by automatically generating a shortened URL and link back to a landing detail page on TweetLister. This page contains photos, a video tour, and additional details on the listing. In addition, when you search for properties on TweetLister, the results you see are actual tweets that feature a picture of the property, if supplied by the member, rather than their Twitter photo.

Do you have any plans for a Facebook equivalent of TweetLister?

Yes. One of our next versions will include the ability to push your listings to your Facebook account, as well.

How important is Twitter in the marketing mix of real estate?

We believe it’s very important! Social media in general is a centerpiece of any business marketing plan, but Twitter in specific brings immediate, round-the-clock proactive marketing to the mix. On any scale — local or international — your listings and information have the potential to reach large numbers of interested people, instantly. With TweetLister, you not only have a tweet out there — you have a tweet that leads to a marketing-oriented detail page. And every tweet you put out there is not only searchable on Twitter — it can be found on Google, Yahoo!, Bing, and other search engines. And on TweetLister!

Have you any Tweetlister success stories, leading to increased lead generation via Twitter?

Yes. Here are two:

“We’re getting quite a bit of ‘traction’ from buyer and seller prospects that said that they’ve seen our Tweetlister posts – especially if they’re technically savvy from St. Louis.” – Kevin Cottrell, Cottrell Realty Group, St. Louis, MO, USA. You can contact him if needed: kc@cottrellrealty.com

“TweetLister has been a positive ‘game-changer’ in the growth and development of our niche Real Estate resource.  We’ve created a marketing focus and listings distribution program unique to our content built on TweetLister’s easy application and efficiency.  We love it, and better yet … our growing number of clients love it.”  – Kevin Schwartz, Top10GolfHomes.com, kevin@top10golfhomes.com

Finally, do you have any social media advice to real estate professionals?

Consider social media as a golden opportunity to reach out to many people at once, and to expand your network and marketing reach. But don’t go overboard on the sales language — be natural, try to “give” to the community by providing information, insight and perspective from your own market and experience. And mix that in with the information that people are always looking for — great new listings! Finally… sign up for TweetLister!

Around the world the recession is easing, or, at least according to economic indicators that is what is happening.

Much of Europe emerged from recession in the second quarter, including the big duo of France and Germany. Most of the rest followed in Q3 including Italy. US GDP grew 0.9% in the third quarter, and Italy’s an impressive 1%. Slovakia has also performed impressively; with growth of 1.6% in Q2 and 1.1% in Q3.

But we all know the situation is not so rosy everywhere in the world. Romania is fighting for its very survival and the UK failed to see any positive growth in the 3rd quarter — despite the positive data including 2 monthly rises in consumer spending.

None the less, already the recovery is sufficient to be increasing activity and demand for overseas property. This is from the people well off enough that the crunch hasn’t affected them, but still worried that they might be if it got as bad as many people were forecasting. Now it is clear it is not going to get that bad, people are back out there and buying again.

But is it really clear that the worst is over? Is the worst over? Here are 5 reasons why we shouldn’t count our chickens before they have hatched.

1: Too Much Positivity is a Bad Sign

It is a commonly held theory (and some even say a trend) in the stock markets and investment circles, that too much positivity (bullishness) means a downturn is looming. Right now there is almost as much positivity around as there was at the height of the last boom. Some investment analysts and many more pundits say this means that the second downturn of a W shaped recovery is currently looming.

2: This is an Upturn, Not a Recovery… Yet

According to recent reports by the International Monetary Fund and the World Bank, the current positive data represents a definite upturn in the global economy, but a lot of work is still needed by governments and central banks around the world to turn it into a full-fledged recovery.

Therefore too many consumers investing and spending too heavily now, believing that this is the recovery, may cause governments to believe it as well, meaning that they will not make the tough decisions necessary to ease us out of stimulatory measures and back into normality.

3: Domestic Changes, Unilateral Economic Decisions and Policies

In the last few years we have all been left with no uncertainty over just how tied together the global economies are. That is why there is so much relief — and resentment — that they are working together through platforms like the G8 and the G20 to try and improve the economy into the future.

However, this also leaves us vulnerable to domestic, unilateral decisions made by any of those countries, especially the main players in the G8. They talk of cooperation but when the chips are down it is still every country for itself.

This was seen clearly when the crisis first began to impact on the EU. EU leaders were frantically trying to make sure that none of them would act unilaterally, make a decision or enact a policy that would affect all of them, without discussing it first. Meanwhile several of the leaders most active in trying to stop such decisions and policy making, were busy making them.

I remember German Chancellor Angela Merkel making a statement on how no country should act independently, and then the next (or very shortly after) announcing the unilateral decision of a major stimulus for German banks.

4: Elections

For obvious reasons then, elections in one country, again especially the major players, can have a very real impact on the global economy. For example the UK has an election coming up, and the Conservative Party (Tories) is widely tipped to win (support from the Sun aside). The Tories have made it very clear that the current level of fiscal spending cannot be sustained, and will not be continued under their regime.

Such a massive change in the direction of politics in the UK could reverberate throughout the world’s economies, and have god knows what other effects it will have on the next level of connection.

Some people will be doubtful of this, luckily most of the banking sector should be out of the woods by the time the election comes, but who knows what effect Tory decisions could have on the state owned banks. Certainly something to consider given how the collapse of US banking, collapsed banking in several other countries in almost one fell swoop. Then you have the value of Sterling to consider.

Any dampening of the UK economy would also undoubtedly affect British demand within overseas property markets.

5: We are talking about the Global Recovery Here

The very fact that we must talk about the global recovery, tells us the magnitude of this crisis. Most of the countries directly affected have endured worse recessions that they have seen since WWII, many more the worst in 30 years or more. Almost every country has felt the effects of this crisis.

That is a lot of pieces to put back together again. There are luckily some very clever people in the IMF, World Bank and other think-tanks on how to do it, but since when did we rely on economists being right, and then the government aren’t forced to listen.

So, while there are clear signs that recession is not going to be as bad as economists (pundits, soothsayers and doomsday-sayers) around the world foretold, it is still way too early to be breaking out the champagne to recovery.

Article written by Liam Bailey (@WriteAProperty) of Property Abroad.com

Having been on the market for just over a year, the US embassy building in London’s Grosvenor Square is to be bought by Qatar’s sovereign wealth fund, Qatari Diar Real Estate Investment Co. The building was designed by Eero Saarinen and built in 1960, although the American embassy has been located in Grosvenor Square since 1938, and America’s ties to London’s Mayfair district date back to 1785, when John Adams, the first US ambassador to Britain and later the second US President, lived there.

The Diar Real Estate Investment Co. is chaired by the Qatar Prime Minister, Shiekh Hamad Bin Jasmin Bin Jaber Al-Thani. It has already invested a whopping $60 billion in projects in more than eighteen countries including Morocco, Oman, Egypt, Syria, the Seychelles, and the UK. Part of that money is invested in the London Shard project, which will be Western Europe’s largest skyscraper.

The company handling the sale, Cushman & Wakefield, has said that “the whole exercise is cost-neutral”, at least for the US government, which is not surprising given that their annual rent for the property is one peppercorn. Times are tough for the US at the moment. It is actually the only US embassy not owned by the US government, which may say something about the “special relationship” the US has with the UK. They like the country, but not enough to buy there.

Cushman & Wakefield would not reveal how much Diar pad for the building, only that Diar is snapping up the remaining 945 years on the building’s lease, so they might see a profit if they sell at the end of that time. The building is actually owned by the Grosvenor Group Ltd., a property company belonging to the Duke of Westminster, which explains why he only needs one peppercorn in rent. That man is RICH.

The undisclosed amount of proceeds from the sale will go towards the construction of a new embassy building in the Nine Elms area of London’s Wandsworth district, which is south of the River Thames. The fact that it is all going to be “cost-neutral” suggests that the US is onto another freebie with their new London pad. The new embassy will begin construction in 2013 and is set for completion by 2016 or 2017, so the 750 staff at the Grosvenor Square embassy are not yet starting to pack up their U-Hauls.

The location of the new embassy puts it near Britain’s M16 security service headquarters, and it will have more space and better security. No doubt the better security is in light of how many new friends America is making around the world right now.

After about two years of static and falling traffic, UK property websites appear to be making a come back with increased growth in traffic recorded in October by Hitwise, an online competitive intelligence provider. From October 2008 to October 2009 website traffic to UK Property websites increased by 4.8%.

Thanks to the supposed demise of the global credit crunch, traffic to top online property sites appears to be making a resurgence and no doubt increased income.

Recent housing price increases reported by Halifax and Nationwide have certainly helped to funnel more traffic online as people generally use the Internet to search for appropriate properties first.

Websites that act on this surge in traffic will benefit the most – especially if they increase their listings supply.

Some interesting website visitor stats:

• Increase in UK Internet traffic to property website is largely driven by a surge of visitors from the South of England.
• In the month of October 2009, Londoners were 15% more likely to visit a property website than the rest of the UK.
• Figures for the South East and South West regions were around 9% in comparison.
• The lowest representation online seen in the UK was from the people of Northern Ireland. Interestingly pre-credit crunch this region was one of the most popular.

The top ten represented postal areas who visited websites in October were all in London and surrounding Burroughs – the South East, with London East Central (EC) and Bromley (BR) topping the list.

The bottom ten was dominated by areas such as Northern Ireland, Scotland, Wales and the North of England. Lerwick in Scotland (ZE) got the bottom representation of all of the regions.

All images courtesy of: Hitwise

• Japanese Companies Are Owed Billions in Dubai [Bloomberg]
• Murdoch junior outbids Sydney A-listers on £12.7m house [Independent]
• Fewer U.S. Homeowners Owe More Than Properties Are Worth [Bloomberg]
• China’s 40 RIchest [Forbes]
• U.K. House Prices Rise, but Fewer Buyers Enter the Market [WSJ]
• Uncertainty clouds Florida’s real estate outlook [NorthJersey.com]
• Bond Street rings up record for shop rents [Sunday Times]
• European Property for €2 Million [Wall Street Journal]
• U.K. Housing Demand Will Stay ‘Depressed’ on Job Cuts, EU Says [Bloomberg]

Bangkok – 5 November 2009 – Energy Complex Co. Ltd. has recently appointed CB Richard Ellis (CBRE) Thailand as the property manager of the Energy Complex, a new landmark in the energy industry in Thailand and offering the latest in energy-saving and green building technology.

The Energy Complex is located on Vibhavadi-Rangsit Road and consists of two grade A office buildings of 36 and 25 storeys, one service building, and two parking garages. The total space of approximately 300,000 square metres within this project will be occupied by the PTT group of companies including PTT Exploration & Production Plc., PTT Chemical Plc., Thai Oil Plc., and other companies related to the energy industry. An office of the Ministry of Energy will also be situated here. This project is scheduled for completion in Q4 2009.

Apart from its unique building architecture, the Energy Complex has been well designed to meet the standards of the LEED (Leadership in Energy and Environmental Design) green building rating system for new constructions in order to save energy and be environmentally friendly. The aerodynamic shape of its facade will help reduce the temperature and heat on the building’s surface. The buildings have also been designed to withstand earthquakes measuring 7.2 on the Richter scale that are 200 kilometres away on the fault line in Kanchanaburi. High-tech building management systems have also been installed.

Furthermore, retail space and facilities including a fitness centre, business centre, seminar rooms and an auditorium for 30-500 people, an exhibition room, restaurants, a 1,000-seat food court, banks, a roof garden, an outdoor exercise area, and parking for around 3,700 vehicles, have been provided for workers and visitors.

Ms. Aliwassa Pathnadabutr, Managing Director of CBRE Thailand, said, “We are pleased that Energy Complex Co. Ltd. has appointed CBRE as the property manager of this major project which has a competitive edge in terms of technology, energy savings, and environmentally friendliness. This is a further step in the expansion of CBRE’s property management services in managing buildings with LEED standards which are well recognized as the global standard for green buildings. This appointment will help reinforce CBRE’s position as the leader in property management in Thailand.”

“We have set up teams of specialists for specific scopes of work based at the Energy Complex, including an environmental engineer as one of almost 50 engineers and safety professionals who have gained a Bachelor’s degree or a Certificate in Occupational Health and Safety for High-rise Buildings, in order to ensure our client’s optimum level of satisfaction and confidence,” added Ms. Chanpen Tawoncharoenpon, Director of Asset Services at CBRE Thailand.

CBRE Thailand currently manages offices, retail, condominiums, apartments, and villas in Bangkok, Phuket and Samui. For the sixth year in a row, National Real Estate Investor, the leading magazine for professional real estate investors, has ranked CBRE No. 1 out of the world’s top 25 property managers. The ranking is based on the total amount of space under management globally each year. As of 31 December 2008, CBRE was responsible for the management of 220 million square metres.

Picture: Mr. Jakchai Barlee (4th from right), the President of Energy Complex Co. Ltd., presents the property management agreement for the Energy Complex on Vibhavadi-Rangsit Road to Ms. Aliwassa Pathnadabutr (4th from left), Managing Director of CBRE Thailand, witnessed by executives from both companies. CBRE will manage these energy-saving commercial buildings which will be fully occupied by the PTT group of companies, and the Ministry of Energy.

If you’ve recently found a little cash down the back of the sofa and you’re in a property-buying mood, you may like to take a look at the following streets around the world. Although prices on these most expensive streets fell in overall value by 12% last year, that’s still better than the 20% to 30% experienced in the mainstream market. Europe was less hard hit than the US.

1. Avenue Princesse Grace, Monaco, $120,000 per sq/m

The most expensive street in the world, where prices last year were actually $190,000 per sq/m. There could be a few who made the plunge last year with a little buyer’s remorse right now. A 334 sq/m four-bedroom penthouse here will set you back US$50.

2. Chemin de Saint-Hospice, Cap Ferrat, South of France, $100,000 per sq/m

Ah, that’s more like it, much more affordable. Less than thirty miles away Avenue Princesse Grace, with just fifteen houses with Mediterranean views. Just one for sale at the moment at an undisclosed price. But as they say: if you need to ask the price, you can’t afford it.

3. Fifth Avenue, New York, $72,000 per sq/m

A 400 sq/m apartment with terraces overlooking Central Park sold for $29m in June. Many residents are staying put until prices come back up. I don’t blame them. $29 million? Chickenfeed.

4. Kensington Palace Gardens, London, $65,000 per sq/m

Prices on KPG, as those in the know call it, have fallen 15% to 20% recently. A private road that abuts Kensington Palace, with several embassies in residence. You’d need to own a country to buy there.

5. Avenue Montaigne, Paris, $54,000 per sq/m

We’re almost slumming it at these prices. This street includes the Élysée Palace, official residence of someone called the President of France. The strong euro and views of the President’s wife have kept prices higher here than some other places.

6. Via Suvretta, St Moritz, Switzerland, $45,000 per sq/m

Prices rose this year by 18%. Yes, rose. That’s rich people trying to take advantage of Switzerland’s low taxes as other countries put theirs up. Geneva and Zurich are also experiencing a boom.

7. Via Romazzino, Porto Cervo, Sardinia, $42,000 per sq/m

Italy’s most expensive street, popular with Russian billionaires, one of whom has apparently bought eight houses there. Everyone needs at least eight houses.

8. Severn Road, The Peak, Hong Kong, $40,000 per sq/m

Down from the number two spot last year, when prices were $121,000 per sq/m. I don’t care how rich you are, that’s going to hurt.

9. Ostozhenka Street, Moscow, $35,000 per sq/m

Russia’s wealthiest have apartments on Ostozhenka, which makes up part of the city’s “Golden Mile”. Free furry hat with each purchase.

10. Wolseley Road, Point Piper, Australia, $28,000 per sq/m

Prices have strayed constant due to the comparatively strong Australian economy and currency.

Photo credits: Alistair, Allie, Wolfie & Grébert

A California-based seller of default data, RealtyTrac Inc, which collects data from 90% of the US population, has revealed that property foreclosures in the US hit a record high in the third quarter of 2009 as more lenders took action against delinquent borrowers. 343,638 properties received foreclosure filings in September alone, the third-highest monthly total behind July and August of this year.

A staggering one out of every 136 American households was in receipt of a foreclosure filing. Amherst Securities Group LP in New York said that there are seven million properties currently in the foreclosure process, compared to a figure of 1.27 million for the same period in 2005. The inevitable impact on house prices is that they will continue their downward slide.

A Standard & Poor analyst has said that although subprime defaults – the initial cause of the problem – may be slowing, prime and “alt-A” loan defaults are on the increase. The prime loan default rate in the second quarter was 6.41%. A prime loan is given to a borrower who has a good credit history, whilst the “alt-A” loan is for borrowers who have self-certified their income without checks. S & P further announced that $400 billion in home mortgages outside of the government-supported Fannie Mae and Freddie Mac umbrella are now in default, and may be foreclosed.

JPMorgan Chase & Co.’s mortgage unit believes that things are only going to get worse, and Washington-based Mortgage Bankers Association thinks foreclosures are set to climb right through until late 2010, when unemployment may reach its peak at an estimated 10% of the US population. September’s foreclosure figures were up 29% from a year earlier.

RealtyTrac’s figures show that third-quarter bank repossessions have risen 21% on the second quarter of this year, and there have been increases in every state except two, plus the District of Columbia. Worst affected has been Nevada with a foreclosure rate of one in ever 23 homes, which is nearly six times higher than the national average. Arizona and California have seen one in every 53 homes hit by foreclosure filings. California, which is America’s most highly-populated state, had 250,054 filings, up 19% on the third quarter of 2008, and actual bank seizures were up 12%. California leads the top six states that account for 60% of the total filings made in the country. Florida is second worst, with 156,924 filings, up 23% on the previous year, with actual bank seizures up 16%.

Photo credits: Jeff Turner via Flickr

The Global Financial Crisis may have devastated real estate prices in Dubai, causing a 48% fall just this last year, as well as causing serious drops in other countries, but one place that is seeing increased prices is Lebanon.

The head of the Order of Engineers in Lebanon has predicted a growth in the real estate sector of 10% to 15% per year until 2013. The reason for this is the influx of Lebanese expats and other Arab investors seeking a piece of Lebanese real estate. Many of these expatriate Lebanese had spent years in other Gulf states, Dubai especially, but many have now moved from the UAE to Qatar and Saudi Arabia, where job prospects are now better, or back to their home country to purchase a property there.

In 2008, transactions accounted for $4.3 billion dollars in Lebanon property, with most of the action taking place on small- to medium-sized properties in Beirut or Mount Lebanon. However, real estate brokers are not too surprised by the effect of this expat activity given the small size of the country compared to the population. If land and property is at a premium, prices can be significantly affected by a relatively small shift in the population either way, or just by the actions of speculative investors.

Property prices per square metre in Beirut are twice the national average, at $1,600, and most sales take place on properties between 150 and 300 square meters. It is also projected that the market will be given a further boost by recent incentives given to commercial banks by the Lebanese Central Bank to offer house loans at very competitive rates.

Property transactions in August 2009 are up 3.9% on July figures, and 28.9% on June figures, although these are still 2.3% down on figures for August 2008 when the boom was at its peak. In the year from August 2008 to August 2009, the average property price rose by just 0.1%. Taken over the past year, the Lebanese real estate market is actually in negative territory, but it is still performing a quite remarkable feat given the global crisis of the past eighteen months, and the fact that very few countries are expecting any great improvement to happen any time soon. In many developed countries around the world, most notably the US and the UK, real estate prices have fallen by 20% to 30% since the crisis began. For these countries to be looking at the Lebanese figures would bring enormous elation.

Photo credits: austinevan via flickr

Property prices in sunny Dubai have already dropped 48% since last year, and they are about to fall another 20% according to research firm Colliers International. The global economic crisis has taken its toll in Dubai as in most other places, and as more completed developments reach the market, prices are falling quickly as demand drops away. This is not predicted to change until demand once again outstrips supply.

Colliers surveyed twenty-three local developers and nearly three-quarters believed the market had not yet found its nadir. Although many developers have downed tools on projects and thousands in the construction industry have been laid off, there is still a 25% oversupply of residential properties in Dubai. That’s around 340,000 residential units, with a further 34,000 set to join that number within the next two years. Unless there is a large leap in the population over the next few years, there will continue to be a glut of properties.

As for commercial properties, the situation is looking even less rosy. Over the next year, the available office space in Dubai is predicted to double. Colliers are not too optimistic about any recovery happening any time soon, believing that when it comes it will be long and slow. They do not yet see any economic indicators that would suggest a recovery is on the horizon of the sort required to kick-start the real estate or construction industry. The fear is that price reductions in the arena of commercial real estate will end up being worse than in the residential sector.

Like so many places that had experienced a property boom over recent years, Dubai’s market began to stagnate last year after a six-year growth period. This led to the delay or cancellation of projects worth billions of dollars.

Despite the many well-known and much-lauded real estate projects in Dubai that may still make it appear a boom town – including the three palm-shaped artificial islands built by the developer Nakheel – this is now a false impression. Of those three islands, only one has been completed and the others have now been put on hold. Another development of islands in the shape of a world map has also seen work cease.

One can only wonder how those speculators now feel who bought property just before the crash. Some may not live to see their money back, let alone a profit.

St. Petersburg, Russia’s second largest city and the fourth largest city in Europe. With a  population of 4,750,000 and the North West region of Russia with a total population of 14.3 million, it has recently become a target for overseas property companies. The progressive local government continues to attract many multinational corporations to re-locate there (Ford, Toyota, GM, Nissan, GE, Coca Cola, Wrigley, Lucent Technologies etc) the economy of the region is growing fast.

Several Property Shows have appeared in the recent years but one stands heads above the others. Based on their experience in providing the most effective Property Shows in Moscow, the aiGroup, continue to show their domination in the market with their St. Petersburg International Property Shows. Despite other claims this show has the largest floor space sold and does not mix International and Domestic property.

The 3rd St. Petersburg International Property Show took place last weekend under a grey sky and cold weather, but nothing deterred a steady flow of eager buyers streaming into the Ledoviy sports stadium during both days.

The St. Petersburg International Property Show remains true to its prime principal of only offering overseas property and not mixing with any domestic real estate product. “We have seen that the difference between potential investors for overseas property and for apartments in St. Petersburg is vast and to mix the two is detrimental to our overseas developers and agents. Therefore we target only the overseas buyer. Whilst this means lower numbers through the doors, it ensures that our participants are only meeting with potential overseas investors rather than families looking for simple apartments in their home town” – Kim Waddoup, CEO of the aiGroup, the organisers.

The 3rd St. Petersburg International Property Show attracted 157 companies offering International Real Estate in 36 countries. These eager sellers were able to interact and present their products to the 6,253 unique registered visitors over the 2 days. It is important to note that the aiGroup is the only company to utilise a registration and bar coded entry tickets to enable exact and accountable visitor figures to be released.

“The St. Petersburg overseas property market remains a developing one but it is growing fast. We continue to see vast differences with our visitors, reminiscent of the early days of our events in Moscow. However as the local economy continues to expand we will soon see further progression in this market” stated Kim Waddoup

The next St. Petersburg International Property Show are 02-03 April 2010.

PR Contact

Ms. Maria Chikhacheva
aiGroup, Russia
www.spb.propertyshow.ru 
Tel +7 495 926 9695
maria@aigroup.ru

A summary of the findings of this index are as follows:

• House prices increased in nearly half of the reporting countries, suggesting a possible recovery may be on the horizon

• The quarterly drop in house prices worsened in fewer than 25% of these locations

• Israel is the top performer from 2Q 2008 to 2Q 2009, with an annual increase in house prices of 12.5%

• Taken quarterly, Norway saw the largest increase from Q1 2009 of 5.3%

• Dubai was the biggest loser over the year, dropping 47%, and was second worst on a quarterly basis, losing 7.5% from Q1 2009

Liam Bailey, head of residential research for Knight Frank has assessed the data and takes the following from it:

House prices are beginning to stabilise across the world, since price falls worsened in pace in only 22% of locations and did not exceed a 10% fall in any country. This compares to double-digit falls during the first quarter of the year in several locations.

Israel performed strongly, being the only place with double-digit growth from June 2008 to 2009 of 12.5%. Other countries, including Norway with a quarterly gain of 5.3%, also recorded prices increases. Scandinavia as a whole is doing well, possibly because it did not experience the great price increases of the boom years, so has had less to correct. Construction there has tailed off significantly, with Sweden building 45% fewer houses in Q1 and Q2 of 2009 compared to the same period a year before. Norway is building at the lowest level since 2000.

The UK housing market rose slightly by 1.1% in the second quarter, and even the US, where the whole crisis began, saw a 1.3% rise in prices in Q2 compared to falls of 7% in Q1 2009 and Q4 of 2008.

Dubai is still suffering falling prices, having lost nearly 50% already, but the Q2 fall was “only” 7.5% compared to 41% during Q1, so the decline may be starting to ease off. Despite a huge oversupply of property there, transactions are beginning to rise due to a combination of low prices attracting buyers, more available credit, and developers being more willing to offer completion dates on their projects.

Overall, however, the market is still highly weakened and remains in a fragile state. Bulgaria saw a 9.7% fall in prices in Q2, which is better than the 12.4% in Q1, but still a significant indicator that certain locations are continuing to suffer. Caution is advised even where prices have been on the increase, as Thailand showed a fall of 5.6% in Q2 following a rise of 2.7% in Q1.

Liam Bailey’s final comment, however, is that “it does appear the worst is behind us”.

Annual price change Quarterly price change Q2 08-Q2 09 Rank Q3 2008 Q4 2008 Q1 2009 Q2 2009 Rank Israel 12.5% 1 5.4% 0.5% 2.1% 4.0% 3 Switzerland 6.1% 2 0.7% 1.2% 2.1% 2.1% 7 Indonesia 2.1% 3 0.5% 0.5% 0.5% 0.7% 15 Jersey 1.5% 4 5.8% -5.4% 5.6% -3.9% 27 Luxembourg 0.8% 5 -0.4% 0.6% 0.6% -0.1% 16 Belgium 0.2% 6 0.2% 1.1% -0.9% -0.3% 18 Hungary -1.1% 7 -0.2% 0.2% -0.8% -0.3% 17 Germany -1.3% 8 4.0% -1.5% -2.7% -1.0% 19 New Zealand -1.3% 9 -2.3% -0.4% 0.1% 1.3% 11 Australia -1.4% 10 -2.6% -1.3% -1.5% 4.2% 2 Norway -1.5% 11 -3.4% -7.0% 4.1% 5.3% 1 Portugal -1.5% 12 -1.9% -1.0% -0.3% 1.7% 10 Sweden -2.0% 13 1.4% -3.6% -3.3% 3.6% 5 China -2.4% 14 -1.8% -2.2% -0.2% 1.8% 9 Finland -2.9% 15 -1.4% -4.3% -1.0% 3.9% 4 Italy -3.5% 16 -0.5% -0.5% -1.3% -1.3% 20 Thailand -3.7% 17 2.1% -2.7% 2.7% -5.6% 30 Russia -3.9% 18 2.9% -0.6% -3.9% -2.3% 24 South Africa -4.1% 19 -0.2% -0.7% -1.8% -1.4% 21 Croatia -6.1% 20 -1.8% -1.2% -1.3% -1.9% 23 Canada -6.2% 21 0.2% -3.5% -4.7% 1.9% 8 Czech Republic -8.0% 22 5.4% 0.2% -2.9% NA - Spain -8.3% 23 -1.3% -2.4% -3.0% -1.9% 22 Netherlands -10.3% 24 -1.8% -5.6% -5.9% 2.7% 6 Denmark -11.4% 25 -1.5% -3.3% -4.3% -2.8% 26 UK -11.7% 26 -5.0% -4.5% -3.7% 1.1% 13 Slovakia -13.4% 27 -0.5% -4.1% -4.5% -5.0% 28 Slovenia -14.3% 28 0.1% -2.0% -10.4% -2.5% 25 United States -15.4% 29 -3.7% -6.9% -7.0% 1.3% 12 Bulgaria -21.9% 30 3.0% -4.1% -12.4% -9.7% 32 Singapore -27.7% 31 -2.7% -6.5% -16.2% -5.2% 29 Dubai -47.3% 32 4.7% -7.8% -41.0% -7.5% 31 Poland NA NA 4.4% 7.3% 0.7% 14

When I was a kid, if you saw “Made in Hong Kong” stamped on the underside of anything, that pretty much assured it was cheap and badly made. You certainly could not apply that to the Conduit Road 39 building in Hong Kong, where a 6,158 square foot duplex apartment has just sold for US$56.5 million. That’s a lot of square feet, but that’s also a lot of money – and the developer Henderson Land thinks it’s a record not just for the city but for anywhere in the world.

The apartment was bought by a company whose money comes from mainland China, according to the developer, but more than that they either don’t know or won’t say.

Despite those fabled “green shoots” of economic recovery having been spotted by some in Hong Kong this autumn, stumping up over $56 million on a pad in the city is speculation in the extreme, especially as it occurred just hours after the city’s chief executive announced he thought a real estate bubble may be forming.

For this particular apartment, if the bubble does burst, that would equate to $11,350 exploding out from every square foot of usable space, although that measurement does include common areas like elevators and lobbies. The issue of how developers assess floor space is a little murky, with various locales having different rules.

The apartment is located towards the top of the skyscraper with views over Victoria Harbor. It’s a two-story unit with five bedrooms and a garden. It has its own ballroom, outdoor swimming pool, fitness centre, and outdoor yoga area – possibly used to calm oneself when the purchase price occasionally comes to mind. If you’re still gasping at the price, consider the fact that a businessman last month bought a 816 square feet one-bedroom apartment across the harbor in Kowloon for $24.5 million. That’s less than a seventh of the size for not much less than half the price. Poor guy. One bedroom. He can’t even have any friends over to stay.

With more than a thousand old industrial buildings left over from the “Made in Hong Kong” manufacturing days, there is a lot of scope for further development in the city, making the prospect that prices could come down a real possibility. For now, these still lie empty due to rules that restrict their purpose to manufacturing, although plans are afoot to allow their redevelopment. City officials are denying that this will be for residential use.

For the moment, one-bedroom guy can still believe he snapped up a prime plot.

Check out their website here – www.39conduitroad.com.hk