A flurry of reports indicates many housing markets around the world are experiencing the same downturns affecting many American cities. Despite this, not all the news is gloomy; a number of markets are showing surprising resilience.
For our June supplement, we’ve chosen to highlight some of these emerging real estate areas. Our scope is international, and we’ve ferreted out opportunities in residential, commercial and retail properties. Of course, the cities we’ve profiled aren’t immune from the housing and office woes rippling around the world, but for the most part, they’ve so far avoided them.
Take Calgary, the Canadian city at the center of an oil boom. It’s the place with the world’s lowest commercial vacancy rate, and asking rents are up too. But extracting gas from Alberta’s tar sands is costly, and some analysts worry Calgary’s current boom may only last as long as oil prices stay high. (See Oil prices spark Calgary office boom.)
Panama City (see Can Panama City avoid a building bust?) is another North American city experiencing a mammoth construction boom. While some analysts say a correction could be due in the short term, the bulls argue that demand for second homes by retired and semi-retired sun worshippers could sustain yet more activity.
Overseas, Berlin and Haifa are two old and often overlooked cities whose housing markets are currently surging. Growth in Haifa (see Haifa finds its groove) is being fed by employees of technology companies. In the eastern portion of Berlin, where property prices languished for nearly 20 years after the Berlin Wall fell, it’s a massive wave of artists who are reinvigorating that area’s cultural life and in the process, lifting property values. (See Wall between property values falls in Berlin.)
Emerging property markets really start to take off when the middle class grows, so it’s no surprise that modern indoor shopping malls are appearing in India. Our article on New Delhi (India gets malled) looks at how mall developers are trying to find winning formulas.
Cities and property values also rise when economies are well managed and inflation is under control. To show an example of what can happen when a government tries to shape the ebb and flow of an economy, we look at the extreme situation in Harare (see A hedge against chaos in Zimbabwe), capital of Zimbabwe, where hyperinflation of 150,000 percent has killed business investment but has surprisingly kept property markets humming.
Government decisions are having a decidedly different effect in Brussels, where the seat of the European Union is helping propel an office boom in Brussels (see Building influence in Brussels).
Finally, we remind our readers that investing in up-and-coming cities can be a gamble. That’s perhaps nowhere more true than Macau, the only city in China where casinos are allowed (see Macau makes a new bet). Wealthy investors are buying high-end condos there to be closer to the action, but by buying multiple units, many are also betting big on the city itself.