Overheard at the International Real Estate World SummitOctober 27, 2011 11:11 am
The International Real Estate Summit was held in Panama City, Florida this month and the event was full of all the right people focused on the latest emerging international real estate trends. E360 was invited to speak on Internet Marketing and its relevance in International Real Estate. Below is an incredibly consolidated look at the high-level trends across the globe as it pertains to our niche. E360 is not affiliated or paid by any of the speakers written about in this article.
2011 International Emerging Real Estate Markets Coverage
One of our favorite speakers was Manfred Chemek from Manhelm International. Mr. Chemek gave an overview of the global real estate markets. According to Chemek, China has the largest GDP growth in the world at 9%. This growth is enabling the Chinese to look abroad for real estate purchases and they are reportedly buying more second homes in U.S., Canada, Mexico and France. One way to tap this market is by reaching them through real estate conventions and then set a goal to book them for property tours. India has the second highest GDP at 8% resulting from the rising middle class. There are anecdotal reports that they are the largest international group buying residential homes in the U.S. valued over $1M. Sponsoring teas at university international clubs is a creative way to generate qualified Indian buyer interest. Generally speaking, the U.A.E. still has financial problems related to real estate. House flipping has been one of the primary causes of the financial problems. Abu Dabai has the most potential in the U.A.E . Morocco is turning into the new Spain for expats however, the Germans and Brits are still buying in the Costa Del Sol of Spain. Southern Africa is putting emphasis on real estate ownership law with the challenges tribal lifestyle present. The country of South Africa does not have the same problems as the region of Southern Africa. Europeans prefer South Africa due to the time zone and opposite seasons. Turkey is doing well with Istanbul being a top opportunity for second homes. The Greek Isles have great deals at a discount with many Hollywood celebrities picking property up. Bulgaria is where many Europeans are starting to retire due to affordability, excellent ski areas and proximity to the beach all within a day drive. Romania offers ideal business opportunities with a hard working employment base. Finland has a high GDP and productivity and the Fins have a higher than average disposable income. In addition, finding the perfect home is made easier with an excellent MLS system. The U.S. GDP forecast is expected to increase from 1.5% in 2011 to 2% for 2012. International buyers can find great buying opportunities in the U.S. It is anticipated that the international buyer will reportedly invested $82 billion in the U.S. in 2010 compared to $66 billion in 2010. South America has been seeing movement as well with Venezuelans enjoying a higher disposable income resulting from the oil industry and as a result are purchasing in Panama. Brazil’s commercial segment has been very active and the coastal area of Columbia is offering great investment opportunities. Chile is offering great agricultural, mining and winery opportunities and Argentina’s beef and ranching industry is still strong. To learn more about Manhelm click here internationalre.blogspot.com.
Another speaker that focused on the Chinese region of the global real estate market was Xiannian Ye. Mr. Ye discussed how to work with Chinese real estate investors. China had the second largest economy in the world at $5.87 trillion GDP during 2010. During the last decade Chinas overseas direct investment grew 40% annually, reaching $68.8 billion in 2010. The Chinese investor in the broadest context has investment criteria focused on inexpensive yet valuable property. Ye reminded us that the U.S. is one of the largest foreign investors in China. Common business protocol is focused on planning, perseverance, patience, personal relationships, perfection and prevention of mistakes. The Chinese have $3.5 trillion in foreign reserves and shopping are for investments. In summary, growth in the number of well-off Chinese people, an increase in overseas education by their children, an appreciation of the Chinese currency and drop in U.S. property prices are leading to more purchases of U.S. real estate from Chinese buyers.
Kim Waddup, Director at AIGroup spoke about Russian real estate investor. Kim made it crystal clear that things operate differently in Russia compared to most other places in the world. GDP is expected to be at 5% in 2011 and 5.5% in 2012 and disposable income is increasing. The disposable income growth is resulting from what is called “efficient tax structuring”. Many of the corporations are based offshore in places such as Malta and this means that the majority of Russians only pay tax on average of 13% of their total income. In addition, cash bonuses are not taxed and inflation is under control and reportedly decreasing and unemployment is falling. Russians are buying in the following places: Bulgaria 17% motivated by close proximity, Spain 14% motivated by climate, Montenegro 10%, Italy 6%, and Greece 4% motivated by bargain buyers. Google only came into Russia 6 years ago and Yandex is the Google of Russia. While the ultra wealthy are buying, it is the middle class whose represent the majority Russian international real estate buyer. Purchase motivation is ranked highest to capital preservation, climate and income potential. Tapping the Russian market takes commitment and brand awareness is key. Waddup recommends setting up a local Russian speaking office, and running print and internet ads 18 months prior to attending property shows. The Russians still love to read magazines and one of the top Russian real estate magazines is International Residences with 35,000 in circulation. Panama is one the top Russia buyer preferences destinations in Central America. Waddup recommends the following points in managing Russian clients: be prepared to answer lots of questions (up to 5 times more than other international buyers); leverage a professional translator who speaks Russian because they will expect you to speak Russia and do not always speak English; and ensure total costs are included in the final price of the deal or the deal can be killed quickly. Click here to learn more about connecting with the Russian real estate investor.
Richard Dolan, CEO at Life Rich, spoke about marketing to the Canadian real estate investor. Dolan reported that 50% of Canadian wealth is held in Ontario, 18% Quebec, 15% Alberta, 13% British Columbia. Purchase use is motivated by 2/3’s investment and 1/3 recreational. As a behavioral finance expert, Dolan pointed that when capital is confronted by crisis it moves to safety and opportunity. The three C’s characterizing Canadian investor behaviors are: 1. Cheap; 2. Conservative; and 3. Chicken. They are not going to over extend themselves. According to a recent Life Rich survey, the most important things to Canadians are: 1. Health; 2. Spouse; 3. Money; 4. Family; and 5. Time with people. The most important things for Canadians to see when away are: 1.The sights; 2. Sunshine; 3. Foods and freshness. Top countries of interest for Canadians are: 1. Bahamas; 2. Italy; 3. St Lucia; 4. Costa Rica; 5. Mexico; and 6. Australia. The preferred annual usage of a property 5 weeks and the price point preference is $275,000. Click here for more information on Canadian real estate investors.
Doug Devitre is a real estate social media expert. The philosophy Doug spoke at the conference was based on the concept of sharing not selling through social media. Postings submitted on twitter and Facebook are one of the most common activities while Doug made the point that commenting on posts shows you care. The LinkedIn profile was another topic covered and Doug suggested that utilizing the applications LinkedIn offers will differentiate your profile and make it more memorable. For example, if you have a WordPress blog there is an app to link it to your profile, in addition, your profile should be keyword heavy, with bullet lists and your company website. Devitre pointed out how valuable recommendations and testimonials are. He noted that one of the most effective ways to gain proper recommendations was by framing the request about the client. For example, asking a satisfied client to share experiences they had with me so others can benefit. Click here to learn more about effective tactics and strategies for social media real estate. Click here for access to all his content on http://budurl.com/dougssecret.
Related to social media we learned about an emerging social media platform for international real estate professionals. Glozal was developed by Tarek Kirschen based in Miami, Florida. With a rapidly growing membership based they have plenty of benefits driving this growth. Some of these features include a property platform structured similarly to MLS, multi-video chat, status updates linked to twitter, facebook and linkedin to name a few. People most likely to be interested are the international real estate professional. The site is very interactive with videos and slideshows located on the homepage. An unlimited amount of videos and photos can be posted to market properties. You can find out about all the different conferences and event that are available to international real estate. All of these features can be translated into over 100 languages. The site is even mobile friendly. Click here to learn more about Glozal.
RJ Palano at Buy Cash Flow Properties spoke about the U.S. residential real estate investing. Having my own rental property, it was easy to see the experience pouring from him. After 1,000’s of transactions across North America, RJ has been focusing on the Atlanta, Georgia real estate market. Forbes magazine ranked Atlanta as the #1 rental market and 4th best city in the US to invest. Atlanta offers strong demographics and they focus on newer homes acquired at a discount. The city is 3rd in job growth. 75% of fortune 1,000 companies are headquartered there. Cap rate is one of the primary returns metrics Palano is using for residential rental properties. Before they buy houses curtained statistics are validated such as tenant to homeowner ratios, neighborhood crime rates, education levels and median income. Areas to avoid are the Northeast and Midwest. There are a declining population and higher property taxes. RJ spoke about the value of land trusts and ease to setup. The platforms they sell on are all cash or equity participation. RJ’s new growth strategy incorporates international markets around the globe. Click here to learn more about buying cash flow properties.
About the Author. Chad Martin, Global Research and Principal at Element-360 (E360), provides real estate advisory services across emerging real estate markets. Our real estate advisory services include market research, capital modeling, marketing and sales for international property. We have a $10 billion gross sales track record focused emerging real estate markets.