The globalization of developing-nation real estate markets : a current perspective

Abstract

To examine today's state of developing nation real estate markets is to gain insight into the evolutionary process of a new market in today's world. Real estate represents a considerable percentage of the wealth of individual nations. As a tradable asset capable of providing leveraged financing, or as the property behind mortgage backed securities, real estate can be worth far more than its face value. For the citizens of developing nations, open real estate markets bring increasing social and financial stability. Nonetheless, to the detriment of the developing world, the power of tradable real estate in developing nations remains largely untapped. Real estate markets are not widely open or functional. For the investor, the volatile and growing economies of developing nations represent opportunities for returns and portfolio diversification. Real estate markets in these regions are in the process of transforming in a way that will render them as easily accessible as domestic real estate or securities traded on foreign exchanges. The evolution of this market takes place on several independent but essential fronts including the public, private, and multi-national organizations as well as individual and institutional investors. Based on current literature research, a series of interviews, and a survey of organizations in the field, this paper documents the major issues involved with the evolution of this market, establishes a framework for evaluating progress, and places participating organizations within that framework. This analysis makes it possible to make an assessment of the current and future state of real estate markets on a global basis as well as in individual countries.