With the prices of U.S. homebuilding stocks falling for the past two years, particularly since the beginning of the year, managers of real estate investment trusts are turning their attention overseas, principally to Japan, Germany and China, Bloomberg reports. The Standard & Poor’s 500 Real Estate Index is down 16% since Feb. 7 and the 16 homebuilders in various S&P indexes declined 44% since July 20, 2005.

The price of Japanese developers are, on average, less than a third of the global average, and yet, land prices there are rising, according to UBS. In Germany, housing stocks are half of the global average. Meanwhile, in China, the government has passed new laws to protect homeowners, and in Brazil, mortgage rates are at record lows. All of these factors are spurring interest in housing markets across the globe. The two fastest-growing areas over the next 12 months that UBS predicts are Japan and Hong Kong, where it projects property developers to return 19% and 16.6%, respectively.

“We’re past the period of time where the rising tide has lifted all boats,” said Sam Lieber, one of the managers of the Alpine International Real Estate Equity Fund, which has 90% of its portfolio invested overseas. “Clearly, we see better opportunities abroad.”

In fact, the National Association of Real Estate Investment Trusts and Ibbotson issued a joint report Monday recommending investors put 33.5% of their real estate stock holdings in Europe and 14.6% in Asia. But given the factors in those regions between 1990 and 2005, the groups would have recommended that investors put only 8.1% of their real estate portfolios in Europe and only 4.1% in Asia during that period of time.

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