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.