Things do seem to not be going well in the real estate industry. Prices are still falling everywhere and buying real estate as an investment is looking no better than any other type of investment. i.e. – probably good in the long term, but of you need to liquidate in a hurry you are up shit creek with no paddle.
Some markets have been harder hit than others, and this is a selection of recent articles covering a variety of markets.
Dubai
Dubai luxury property market report
There is no question that Dubai’s luxury real estate market is facing major issues at the moment, despite the constant denials and positive-spin press releases being issued, some developers are facing up to reality, and the number of canceled or delayed projects makes a mockery of announcements of new projects.
There is a stunning amount of property for sale in Dubai. For the first time in Dubai’s history – the industry is facing foreclosures. Nothing like the amount of foreclosure in the USA but they do not have adequate laws in place and we see a looming disaster for any buyers unlucky enough to be unable to pay their mortgage. Perhaps including jail time.
With property prices falling, jobs being lost and tightening credit conditions, Dubai is facing negative equity and repossessions for the first time. There are estimates that as many as 40% of the mortgages in Dubai are already in default.
Europe
Property prices in Spain fell 6.8% in the first quarter of 2009, the fastest rate of decline since records began, despite the fact that sales volumes dropped 39% over the preceding year. No surprises there – it is fair to say the data has been lagging well behind the figures for the last year or so. With unemployment in Spain pushing 20% and an average Spanish home costing around 7 times the average annual salary, we obviously have a ways to go before this correction is over.
The current pain in Spain´s tourist industry continued in the Canary Islands last month. As tourist arrivals to this key holiday destination and former property investment hot spot continued to drop dramatically. According to new figures just released by the Spanish airport operators AENA.
The number of sales transactions in 2008, fell by 20% compared to 2007, and the decline is continuing through 2009. 746,400 sales were concluded last year, against 929,300 in 2007, according to figures released yesterday by the Superior Council of notariat (CSN). The number of transactions in January and February 2009 fell 37% compared to the same period in 2008.
The United States of America
The USA – what can be said about this market that hasn’t already been said? The home of the sub prime crisis is still crashing hard. Commercial real estate defaults are the next looming disaster for the USA’s already battered economy.
Commercial real estate the next US financial disaster?
Lately, even the mainstream media in the United States are overdosing on apocalyptic reporting.
Once you’ve covered a global financial meltdown, a global swine flu pandemic, the bursting of the largest residential real estate bubble in memory, the prospect of bankruptcy at two of the Big Three auto manufacturers, U.S. policies on torture (and its salient drawbacks and rewards), and the spectre of thermonuclear war waged by any of a handful of rogue nations currently run (or about to be run) by insane persons, you do start to get a little jaded.
What else could possibly go wrong?
Las Vegas real estate as an investment? Place your bets and watch the wheel spin.
With property values continuing to decline all around the world, one has to ask the question as to which market is the most likely to become an attractive investment destination first. Personally, I think we have some considerable distance to fall still, but that gives the property investor time to give serious consideration as to their next investment. Anyone considering buying property in the USA as an investment should seriously look at Las Vegas with an eye on the future.
Filed under: International Real Estate, Investing | Tagged: buying property as an investment, real estate investments
