Investors See Asian Real Estate Outpacing Other Markets

Investors attending Thompson Reuters Global Outlook are keen on the developing Asian property markets, expecting them to outperform markets in both the UK and US in the year …

Investors attending Thompson Reuters Global Outlook are keen on the developing Asian property markets, expecting them to outperform markets in both the UK and US in the year ahead. Stocks edged out the recovering real estate sector as an investment choice, while half of those surveyed expect repercussions in over-leveraged markets from a Dubai domino effect. For more on this, see the following article from Property Wire.

Property investors are likely to be more interested in developing Asian real estate markets next year than traditional countries like the UK and the US, according to a new survey.

Some 85% of the 150 strong audience at the annual Thomson Reuters Global Property Outlook said they expected developing Asian markets like China to deliver total returns in excess of 10% in 2010 as economic growth feeds demand for homes, shops and offices.

In contrast, just 13% of those delegates surveyed said that property returns in the UK or the US would match those seen in developing Asia, even though both markets looked to be nearing the twilight of their real estate corrections.

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Some 61% said they expected UK total returns between zero and 10% next year, broadly in line with Eurozone total property returns for the same period.

While around half of respondents expected to see the same zero to 10% total returns range in developed Asian markets like Korea and Tokyo as government measures to thwart real estate bubbles bear fruit.

The survey also found that 42% estimated US total property returns between minus 10% and zero, while 39% expected returns between zero and 10%.

Congested credit markets and a reluctance among some banks to lend to real estate have encouraged bargain hunters to delay investment sprees and 61% said they expected a flat property market next year.

They are not particularly keen on investing in Dubai with a general fear that the worst global real estate slump for generations was not over yet.

Around 50% said they believed Dubai’s debt crisis was a sign of further troubles to come for highly leveraged property markets, while 37% said the problems were too small to spark a calamity outside the Gulf region.

Until valuations stabilize further and banks resolve massive exposures to distressed property loans, real estate will have to compete strongly to maintain its weighting in a diversified portfolio, the survey results indicated.

Stocks are the preferred asset class with 33% expecting shares to perform best in 2010, with 28% picking property and 26% selecting commodities.

This article has been republished from Property Wire. You can also view this article at
Property Wire, an international real estate news site.

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