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Where in the world? - Tuesday, 15 December 2009

The annual Thomson Reuters Global Property Outlook has revealed the markets investors are looking to inject their money into next year – so will it be traditional favourites or somewhere a little more off the beaten track? finds out…

Despite some predictions that there may be a double dip in property prices in some established markets next year, research from the Thomson Reuters Global Property Outlook conference shows that sentiment was still bullish for under-developed Asian countries for next year.

The vast majority of investors at the conference said that they have their eye on those developing Asian markets next year, rather than traditional countries like the UK and the USA.

Markets such as China are being tipped to deliver total returns in excess of 10 per cent in 2010 as economic growth feeds demand for homes, shops and offices.

The investors thought the UK and US property markets were unlikely to match Asia for profitability, despite signs those markets were also recovering.

Some 61 per cent said they expected UK total returns between zero and 10 per cent next year, broadly in line with Eurozone total property returns for the same period.

The audience were spilt on whether investing in the US would be profitable at all in 2010 – 42 per cent estimated US total property returns between minus 10 per cent and zero, while 39 per cent expected returns between zero and 10 per cent.

So the message seems clear – for maximum returns developing nations in Asia are the place to be next year. Countries such as China and India look set to be front-runners.

In terms of publicity-hit Dubai,half of the investors thought this was simply the start of major problems for the emirate, which would reflect the future for the global markets, whilst others thought these problems would be confined to Dubai itself.

In related news, Singapore property prices have seen the greatest rise in the world during the third quarter of 2009, according to the latest Global House Price Index from Knight Frank. During Q3, Singapore property prices increased 13.7 per cent compared with Q2.

Although property prices in two-thirds of the countries in the index increased, property values in over half the destinations featured still remain down year-on-year.

“House prices are now rising in a clear majority of locations around the world with almost 70 per cent of the locations reporting growth in the third quarter of 2009.

“This compares with under 50 per cent during the second three months of the year,” said Liam Bailey, head of residential research at Knight Frank.

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