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Foreign Buyers Primed for Real Estate Spree

By    |   Tuesday, 13 Jan 2009 09:50 AM

Is this what a real estate bottom looks like? Maybe. Foreign investors say they are bullish and ready to buy, particularly U.S. real estate, according to a new study.

A poll conducted by the Association of Foreign Investors in Real Estate of 100 of its members shows that 54 percent of lenders and 40 percent of equity investors intend to boost their global real estate activity this year.

The numbers are even higher for the United States. A whopping 73 percent of equity investors intend to allocate more money to U.S. real estate this year, and 58 percent of lenders plan to lift their activity here.

New York and Washington, D.C. — in that order — topped the city popularity chart for the respondents. That’s worldwide, not just in the United States.

Everyone knows what happened to the U.S. real estate market last year.

As credit flow halted, commercial property sales naturally fell.

But some now say the worst is over and believe the U.S. real estate market will rebound first, just as it fell first. The fact that it’s the world’s biggest property market doesn’t hurt either.

Accordingly, real estate has officially entered the financial lexicon as a value investment. It may be time to climb aboard.

“If you are going to be an international investor you'll want a significant part of your portfolio in the largest market,” Jim Fetgatter, the association’s chief executive, told Reuters.

The United States took first place by a huge margin as the country offering the most stable and secure real estate investments, with 53 percent of respondents’ votes.

Germany and Switzerland tied for second with 11.3 percent of the vote, while Australia and Canada tied for fourth with 4.8 percent.

The association’s members named multifamily residential real estate as their top choice in the United States, followed by office properties, industrial, retail and hotel.

Foreign investors and lenders aren’t the only ones to turn bullish on U.S. real estate. Distressed asset investors all over the country are snapping up properties at bargain prices.

For example, sales of Southeast Florida condominiums and single-family houses jumped 17 percent in November from a year earlier, according to the Florida Association of Realtors.

Buyers snagged bank-owned properties, foreclosures and homes from owners willing to sell at deeply discounted prices.

“We have been predicting for some time that the number of South Florida residential transactions would surprise most people,” Peter Zalewski, principal of Condo Vultures, a real estate consulting firm in Bal Harbour, Fla., said in a statement.

“Early indications are that the December closed sales numbers will be just as strong as November’s if not stronger. We are getting reports that many all-cash buyers are moving into the market.”

Buyers closed on 1,623 condos and houses in Miami-Dade and Broward counties in November, compared to 1,391 transactions a year earlier.

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Is this what a real estate bottom looks like? Maybe. Foreign investors say they are bullish and ready to buy, particularly U.S. real estate, according to a new study. A poll conducted by the Association of Foreign Investors in Real Estate of 100 of its members shows that 54...
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Tuesday, 13 Jan 2009 09:50 AM
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