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GLOBAL REAL ESTATE

Local Markets

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Course Overview

1.How the Global Economy Shapes Your Market

2.Your Hometown Global Market

3.Cultural Literacy for Business

4.Serving the Global Market

5.Networking Power

6.Planning>Action>Results

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Try the self- assessment

quiz on page 5

Are You Already Global?

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1. How the Global Economy Shapes Your Market

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Global economy, local real estate markets

Global flow of capital and wealth

Real estate as an investment

Trends and indicators

In This Chapter

Use this information to monitor trends and indicators and synthesize the information into meaningful knowledge for business planning and decisions.

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Global EconomyLocal Markets

Global economic forces impact your business

Real estate is a storehouse of wealth

Which indicators and trends should you monitor?

Design a personal data plan

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A Shrinking World?

Spread of capitalism New wealth seeks

opportunities and safety in real estate

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Most Stable and Secure

0%

10%

20%

30%

40%

50%United States

Germany

Canada

FranceAustralia U.K.

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Best Capital Appreciation

0%

10%

20%

30%

40%

50%United States

U.K.

China

Brazil Germany Canada

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NAFTA

MER

COSU

R

APEC

APEC

ASAEN

GAFTA

COMESA

E.U.

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Connectivity

Asia, 42%

Europe, 24%

North Amer-

ica, 14%

Latin Amer-

ica; 10%

Africa; 3%Middle East; 3%

Oceania; 1%

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Round-the-clock financial worldInstant access to market signals

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FTSE 100 London

Hang SengHong Kong

DAX Frankfurt

CACParis

NikkeiTokyo

Dow, S&P500, NASDAQNew York

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Interdependence and Specialization

Advantage: economic efficiencies and benefits

Disadvantage: dependence on other countries

Workers’ remittances = triple official government foreign aid

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Affordable airfares Convenient flights to

hub cities & resorts Immigrants maintain

homeland ties U.S. expatriate

retirees

Ease of Travel

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Capital—What Flows?

Currency

Assets

Capital goods

Debt

Credit

Information

Technology

Innovation

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Capital Seeks:Acceptable risk/returnFavorable ROIQuality propertiesAffordable and available creditOrderly, transparent markets

Capital Flees:Falling returns and values

Ownership restrictions Movement restrictions Tight, expensive credit

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Capital Flow Theories

Bargain Rate Theory

Capital flows to the point of relative weakness. Where prices are at bargain rates and other currencies have more buying power.

Loss Avoidance Theory

When values decline foreign investors avoid assets which may lose value and any advantage gained from exchange rates.

Market Linkage Theory

A single global system interlinks the world’s economies which rise and fall together.

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Select, monitor, compare key indicators

The Economist, Financial Times, Wall Street Journal

Government Web sites

NAR Economists’ Outlook

Staying In the Know

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How can you catch

the right signals?

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IndicatorsGDP

Employment

Consumer Price Index

Labor Productivity

Retail Sales

Exchange Rates

Interest Rates

Flow of Funds

Mortgage Rates

Imports, Exports and Trade Balance

Direct Investment Abroad

Foreign Direct Investment

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Key Point Review

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