New Trends in International Markets

1
New Trends in International Markets

• Kevin Brass
• International Herald Tribune
• International Real Estate Congress
• Realtor Association of Greater Miami and the
  Beaches
• June 9-11, 2009

2
International Whats Going On???

London Property Prices Increase Despite Economic
Slowdown!
Crisis bites beach boom in Costa Rica
Property investor confidence improves says Jones
Lang LaSalle!
Trump Baja venture leaves buyers high and dry
Developers stampede to offload properties!
Second home market in Italy remains stable
3
The Future

• The boom in second home ownership over the past
  decade will be as nothing compared with the
  growth we will see over the next decade.
• -Knight Frank, 2008 Wealth
  Report

4
The New World

• Global flow of investor money into residential
  property
• Number of HNWI increasing at dramatic pace
• Rise of sovereign wealth funds
• Air/boat transport easier than ever

5
International Headlines An Overview
6
Dubai Returns to Earth

• Prices down 32 percent from Q1/08 to Q1/09
• Source Knight Frank

7
Dubai Returns to Earth

• Several large projects cancelled or delayed
• Speculators out of the market
• Who is going to buy??

8
Spain Continues to Slide

• Prices down 20 to 40 percent in last year
• 
  
  Industry estimates

9
Spain Continues to Slide

• More than 1 million empty new homes
• Pound-Euro exchange rate
• Corruption scandals/home demolitions

10
Vultures in Bulgaria

• Classic overbuild based on investors
• U.K. speculators want out
• Remains vibrant tourist area

11
Caribbean Holds Steady

• Many unexplained oddities in the region
• -Global Property Guide

12
Caribbean Holds Steady

• Barbados, BVI and Antigua still selling
• Wealth of high-end, one-of-a-kind projects
• Solid core constituencies in Europe and U.S.

13
Central America on Hold

• Several major projects delayed

14
Central America on Hold

• Costa Rica Steve Cases Cacique, St. Regis
  headline long list
• Belize Where is Ara Macao?
• Panama City Disappearing towers

15
Panama Not Immune
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Top Movers in First Quarter???
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Top Movers in First Quarter???

• Israel 10.9
• 
  
  Source Knight Frank

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Top Movers in First Quarter???

• Israel 10.9
• Czech Republic 9.9
• 
  
  Source Knight Frank

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Top Movers in First Quarter???

• Israel 10.9
• Czech Republic 9.9
• Jersey 6.9
• Switzerland 5.6
• 
  
  
  Source Knight Frank

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Top Movers in First Quarter???

• Israel 10.9
• Czech Republic 9.9
• Jersey 6.9
• Switzerland 5.6
• Top Asia Indonesia 4.6
• 
  
  
  Source Knight Frank

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Danger Zones
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Disclaimer

• Comments and opinions mentioned here represent
  the opinions of the speaker and do necessarily
  represent the views of any organization or any
  rational industry observers. They are, in fact,
  simply opinions, informed as they may be. Any
  attempt to utilize this information and make
  investment decisions based on the information is
  purely at the risk of the user and relatively
  insane. Any resemblance to characters real or
  imagined is purely unintentional. No offense is
  intended by any of the speakers remarks. Buyer
  beware. Make sure and read the fine print.

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Danger Zones
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Danger Zone Mexico

• Unbelievable string of bad news
• Problems of drugs, violence, social unrest are
  real
• Large number of new projects
• Projects defaulting

25
Danger Zone Panama City

• It can be useful to note that today, a large
  percentage of condos in Miami, Florida are priced
  equally (if not less expensive) than those in
  Panama City.
• -Panama Report, June 2009

26
Danger Zone Panama City

• More than 300 towers in planning in 2008
• Units not selling
• Deals hinged to canal project

27
Danger Zone Thailand

• Government instability
• Changing ownership rules
• Regional competition

28
Rebound Markets

• Who will bounce back??

29
Rebounder Costa Rica

• Stable
• Improved financing
• Still U.S. friendly
• High end projects drive market

30
Rebounder British Columbia

• Winter Olympics coming up.
• Close Asia ties
• Strong California tourism base

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Rebounder London

• Financial center
• Improved exchange rate
• Middle Eastern/Russian super-wealthy

32
Rebounder Seychelles

• Big buzz
• Development policies favor high-end
• Four Seasons, top brands in the market

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The Latest Trends-June, 2009
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The Latest Trends-June, 2009

• Safe Haven Buyers

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The Latest Trends-June, 2009

• Safe Haven Buyers
• Diversifying portfolio outside home country
• Looking for land, house, not condo
• Long term investor wants stability

36
The Latest Trends

• The New Renters
• Seventy percent of new listings said they
  didnt intend to rent their property when they
  bought it.
• --HomeAway.com

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The Latest Trends

• The New Renters-Consequences
• Flood of rental property on the market
• Rental rates going down
• Fewer investor buyers

38
The Latest Trends

• Flight to Quality

39
The Latest Trends

• Flight to Quality
• Security in high end
• Brand names rule
• Traditional markets remain strong--south of
  France, Italy, Caribbean

40
The Latest Trends

• Growth of Asia Buyers in U.S.

41
The Latest Trends

• Growth of Asia Buyers in U.S.
• Restrictions eased on foreign investments
• U.S. seen as secure
• Southern California Chinese most common foreign
  language search
• Looking beyond traditional areas
• Source Immobel

42
The New International Buyers

• What do they want???

43
International Buyers

• Conspicuous consumption is out
• Nobody wants to be seen parading about in this
  economy.
• -Greg Furman, chairman, Luxury Marketing Council

44
International Buyers

• Name Droppers
• Designer architects
• Interior style
• Name labels throughout

45
International Buyers

• The Value-Driven Luxury Buyer

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International Buyers

• The Value-Driven Luxury Buyer
• Looking for securityboth home and financial
• Income potentialeven if not renting
• Proximity to attractions

47
International Buyers

• Looking for that special something
• Marinas
• Golf/tennis/equestrian

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International Buyers

• Looking for that special something
• Marinas
• Golf/tennis/equestrian
• The new brag Im Green Baby!

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Market Signs to Watch
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Market Signs to Watch

• Exchange Rates
• 6/10/09
• 1 1.40 euro

51
Market Signs to Watch

• Exchange Rates
• 6/10/09
• 1 1.40 euro
• 3/10/09
• 1 1.27 euro

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Market Signs to Watch

• Exchange rates
• Inventory absorption
• Glut of hotel-condo units

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Market Signs to Watch

• Exchange rates
• Inventory absorption
• Building restarts

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Market Signs to Watch

• Exchange rates
• Inventory absorption
• Building restarts
• Shifts in government policy
• Croatia joins EU
• Asia governments allow foreign investments

55
Market Signs to Watch

• Exchange rates
• Inventory absorption
• Building restarts
• Shifts in government policy
• Vulture funds start selling

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How to Grow an International Business
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Tips for Finding International Clients

• Do your homework define your targets.
• Research the countries you decide to target.
• Plug into foreign groups and embassies.
• Find and use the many NAR resources available.
• Go to International Real Estate Expos.
• Go on foreign trade missions.
• Join The International Real Estate Federation
• Network with other luxury agents.
• Develop relationships with resort property
  developers.
• 
  

58
The New Marketing

• Networking, viral and otherwise
• -Facebook works why Tweet?
• Back to basics
• New media connections
• More selective, targeted advertising

59
International Shows

• SIMA in Madrid
• MIPM Europe/Asia
• Various London shows OPP Live
• Cityscape Dubai

60
International Resources

• RSS Feeds Financial Times, Overseas Property
  Professional
• London newspapers London Times, Telegraph
• Analysis Knight Frank, Royal Institution of
  Chartered Surveyors, Savills, Global Property
  Guide

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• Kevin Brass
• kabrass101_at_gmail.com
• 1 512.382-0245
• Skype Kevin.Brass
• Facebook Kevin Brass