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Property Trends to Watch in 2010

In 2010, the “new normal” will become reality for international real estate. The crisis is over. No longer is the possibility of an economic apocalypse hovering around the corner, most industry experts agree.

But there is still very little normal about this market. Few experts predict any sort of real recovery in 2010, as lenders and sellers hunker down. Unemployment figures and GDP will continue to serve as key housing indicators in many regions, side by side with median prices and sales numbers.

Sifting through the data and prognostications, several key factors will clearly shape the business and drives sales in 2010, from the beaches of Brazil to luxury apartments in Hong Kong:

Rental Dreams: Yields will be intensely tracked as investors look for properties that generate revenue in the short term. Any revenue that beats measly bank rates will be an easy win. But the result may be an ocean of available units, making it difficult to find actual renters for anything other than prime properties.

Google Moves: Few doubt that Google will develop as a major player in property search. But it’s still unclear how the search giant will impact the listings business and consumer habits. There might not be definitive answers for years, but there’s little doubt Google will be the talk of the industry.

Safe Havens: A germ of a marketing idea will continue to develop as a movement, as buyer and investors look for overseas spots to stash income. Fear of economic collapse will spread, along with Ayn Rand quotes. Smart promoters and developers will market property as a hedge against financial disasters.

Cash Remains King: Hardly a new concept, but the credit spigot will stay clamped down in the year ahead, experts agree. That first-time second home buyer scraping together 20 percent down to buy a beach condo will be nothing more than a treasured memory. But buyers with cash will be able to call their price.

Not-So-Emerging Markets: Not long ago industry executives talked up emerging markets as the can’t-miss rocket ship to the moon. These days, serious investors are wary of fledgling markets, which once posted double-digit annual gains. Projects in markets like Bulgaria and Cape Verde will have to demonstrate consistent demand and stability to convince skeptical buyers.

Off Plan, R.I.P.: The idea of free-rolling consumers buying blocks of condos in pre-construction is officially a thing of legend. It was true in 2009 and it will stay true in 2010. Any project counting on off-plan sales is clearly looking at a long, painful slog.

Inventory Anxiety: Perhaps more than any other single indicator, industry experts will be tracking inventory levels. In markets like Florida, Spain and Costa Rica, the real bounce won’t start until the supply of available properties and cheap foreclosures dries up. Once inventory levels are depleted, with little new construction in the pipeline it could be years before new projects come on to the market, giving existing properties a real value boost.

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