Property News From Around The World

Speaking of The World – The International Herald Tribune reports that Nakheel have so far sold 70% of The World Islands in Dubai. Although, apart from a Belgian Baron planning a boutique hotel, and rumors of a couple of other investment groups, such as an Irish consortium to develop Great Britain and  Chinese consortium to develop China,  much of this development seems to have been sold either to Dubai based developers, or other neighbors. Seeing as Nakheel is government owned, and all the developers are government owned, they have effectively sold it to themselves…..

It looks as though there will be tough new regulations imposed on real estate agents, brokers and lenders in the US – apparently they are the ones to blame for the current crisis – not the governments and central banks for over lending……

This follows on from promises by the UK government for the Office of fair trading to investigate the real estate market in the UK. So it would appear we are going to be even more regulated from the bottom up in the UK. What we really need is some accountability at the top. Fat chance of that. Look forward to more rules next year.

It looks like the luxury property market is in for a rough ride in 2009, and British house prices are set to fall in 2009 - probably even further than in 2008. Spain is probably the worst hit of all the European countries, but property prices are falling in France pretty dramatically as British expats bail out thanks to the value of the pound. The question is – how far will the Euro fall when reality sets in? The Eurozone banks are heavily exposed to eastern European markets and when these loans start defaulting in 2009 and the German car manufacturers realize no one can afford a new Mercedes, who knows?

Commercial property seems to be the next market to be hit, with estimates that British banks are set to lose £70 billion in 2009, triggering another government bailout and possibly the fall of the government? Over the water in the USA, commercial developers are already holding their hands out for government bailouts. I can’t see it myself. At least with the auto industry there is some sort of justification in the form of workers employed, but just to prop up the cost of commercial real estate? Not going to happen. Unless they turn themselves into banks. Although, it turns out that The Treasury Department has already committed $10 billion more than it was authorized to give out. This is what happens when you give some one a blank check book……

If anyone was hoping that China would leap to the financial rescue of the rest of the world, this seems unlikely. With sales of plastic crap from China falling through the floor, the New York Times has an interesting article of one village in China which existed solely to produce crappy knock offs of famous paintings to hang in Motel 6s.The luxury retail world is also feeling the pain, and  Louis Vuitton knockoff bags may be the next new “luxury,” if no one can afford the real  thing any more…….

Happy New Year