Investors turn to property as stocks sour

Bangladesh News.Net
Saturday 11th October, 2008

Investors are more likely to turn to 'bricks and mortar' or 'hard' assets as the meltdown in paper assets continues.

Shares, bonds, and debt instruments have fallen sharply in recent weeks in the aftermath of the subprime mortgage crisis and credit crunch.

Investors are now scouring property markets in economies that have been less affected by the downturn in global markets.

Oil-based economies in the Gulf are powering ahead with real estate projects running into the hundreds of billions of dollars.

This week's Cityscape in Dubai, an annual real estate showcasing festival over four-days attracted 70,000 visitors from all over the world, well up from last year's 60,000. Exhibitors were kept busy with orders for apartments and villas in completed projects and off-the-plan. Prices in the UAE emirate have been rising sharply. A report form international realtor Colliers, released at the start of Cityscape, said price rises had 'slowed' to 16% in the September quarter.

The government on Thursday sought to reassure local investors that the banks in the region were sound, and the real estate industry was solidy backed by government. It was pointed out that 90% of all developers in the emirate were government-owned, or had partial government ownership.

There are other pockets around the globe where real estate remains strong. Abu Dhabi, the capital of the UAE is another market forging ahead with a maze of property developments. Ras al Khaimah, Ajman, and Sharjeh are also rolling out projects. Neighboring states Bahrain, Qatar and Saudi Arabia have also been caught up in the real estate cycle.

On the other side of the world in Sydney, Australia, prices of high-end properties were also in demand. A Goldman Sachs director, Darren Harvey, spent $4.5 million on a new home in Manly, a Sydney seaside suburb.

At Northbridge a record $9.05 million was recently paid for a 1996 harbourfront house with six oversized bedrooms, the local Sydney Morning Herald newspaper reported.

With its own beach, jetty and boatshed, it had been marketed at $8.25 million-plus, having previously traded in 2003 at $7.13 million.

In Mosman, another Sydney coastal suburb, empty-nesters spent $7 million-plus this week to buy an off-the-plan harbourfront apartment.

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