Forbes recently released a list of top emerging world real estate markets that is based on in depth studies. By looking at inflation rates, access to lending opportunities, economic expansion and strength of individual property rights they were able to filter out promising markets worldwide.

Despite the worldwide softening of certain markets, due to drying up of credit funds, Forbes has found some promising locations that are poised to explode within the next 5 years.

High on the list is a city that might come as a huge surprise to some. Tel Aviv while having struggled in the late 90s and early 2000s has seen a recent climb in prices. Predictors expect this to rise further due to a great economic year in 2007.

Purposely discounting developing markets because of their often high volatility, countries such as the Baltic states Estonia and Latvia were scraped off the list. While enjoying great growth in 2006 in both of these countries, depreciation of property went down by 7% and 14 % respectively last year.

Emerging countries were defined as those who are in transition from developing to advanced such as Brazil, Russia, China (often referred to as BRIC) and India.

One strong factor that was considered was the fact that unless there was satisfying loan access for investors, the country got eliminated. The market simply breaks down if people can’t find lenders and those few who can afford to pay cash are not enough to keep the market strong.
Perhaps the biggest surprise are the following four destinations. Chile, Jordan, Aman and Santiago.

While inflation hasn’t been out of context with growth, the real estate market is providing greater value because of economic expansion.

While these last four markets aren’t set to explode within the next 12 month, they are predicted to do very well within the next 5 years.

This provides a perfect investment planning opportunity for investors who crave new opportunities.

source : OP-Mall in Prediction

The sharp increase of petrol and power prices is expected to have a great impact on the real estate market with slower transaction predicted, however, it makes a great opportunity for investors to make their property investment. It is the best time to buy, according to real estate market analyst Gavin Tee.

The chain effect of rise in petrol prices has caused the consumers to change the buying and investment behavior. Due to the extra burden on the expenses, many may drop the plan to purchase a new home or to make a new investment . However, Gavin thinks this behavior is only an immediate short live response to the increase , and the slow down of real estate market is just a temporary scenario.

Gavin is the managing Director of Arborland & Co, also a principal consultant of 5G Channel introduced by FECAM to serve the Chinese community in property investment matter. He is also the council member of Malaysia institute of estate agent (MIEA).

Gavin is optimistic of the impact on property market by the hike in oil price , as he believes that property is an investment that provides good hedges against inflation.

Unlike commodities where the sensitivity level is higher , any increase in oil price will trigger immediate effect . Property sensitivity level is lower and tend to have delay respond. However , after a short time the price will be adjusted substantially. The prices will likely to escalate within 6 months time. Therefore, the following 6 months will be the best time to buy.

Gavin believes the secondary market of completed properties will become the new star in property transaction for the reasons that these properties prices are not affected by the rising construction cost in building materials . Furthermore, the property price for the secondary market has not been appreciated much in the last two years when compared with other new projects. Hence this sector of property will attract more buyers as it offers more freedom for negotiation and larger capital appreciation when compares to the new project which prices is heavily relied on the cost of building materials and other external factors.

For the new projects or under - construction properties , there is not much choice but to raise the selling price. For the completed properties , they may not have to follow.

Gavin views the medium cost new housing projects will be the main sector hit by the hike of oil prices as construction cost contribute the main portion of cost when comparing to high-end project where costs are well distributed into design fee, conceptual set up, location and other professional charges. In addition, the medium cost housing project are constrained by the ceiling prices set by the market unlike the high end property has less constrain on pricing. ( ie. Construction cost may attribute 50% of selling price to medium cost project while it may only be 25% in the case of high cost property.)

It is expected that many smart investors will take this opportunity ( before the property price shoot up ) to invest heavily in the real estate market. The number of such investors may not be substantial however they will become of the most profitable ones.

Gavin also believes that the repercussion to the foreign investors is mild as Malaysia real estate prices are considered relatively low in the Asia region as foreigner investors mainly invest in high-end condominium , land, commercial or corporate buildings which has smaller impact by the latest increase of petrol price is small.