Reits Today

USA Real Estate Market

Brief history

Where is the market going?

Current industry ratio

As we approach the half way point of 2007, the immediate outlook for the US property market is not encouraging. While many home owners continue to live the dream, often ignoring bad news along the way, there are signs that a major reality check will soon be on the way. While it will be no bad thing in the short term, many US residents will be financially scarred for years to come - and as mentioned above, a massive 1.5 million are expected to lose their homes in 2007 alone.

Future Real Estate Market in the USA

The authorities have tried their best to discourage over exuberance in the property market, but buoyed by a rising stock market many Americans have decided to ride their luck a little longer. For some the gravy train may about to stop, and we should see a move towards more responsible house buying patterns over the next couple of years.

While long term the market has massive potential for substantial growth there may be better opportunities over the next couple of years, after the steam has been taken out of the current market boom. Caution is the watch word at this moment in time.

JAPAN

(Slides :

-Recovery from the real estate bubble

-Reits introduced 2000

Land prices rose 2007,)

The Japanese recovery from the real estate bubble had taken many years, but largely thanks to the introduction of Real Estate Investment Trusts in 2000, the market is very promising for the moment. REITs bought 1.51 trillion yen in property in the 12 months ended June 30, with 52 percent of the purchases in Japan's three largest cities Tokyo, Osaka and Nagoya.

Japanese commercial land prices rose this year for the first time since the bubble burst in 1991 and foreign investment capital is - as we are speaking - flooding into the country.

(Slides:

-Foreign Investment Capital flooding into Japan

-In April 2007, Morgan Stanley bought 13 hotels in Japan from for 281.3 billion yen

- Goldman Sachs spent 2 trillion yen since 1998 buying Japanese properties

-Concerns for a new property bubble exists

For example, Morgan Stanley, GE Real Estate and Goldman Sachs has during the last year made investment of several hundred of billions yen in the Japanese real estate market according to Bloomberg. The companies think that the real estate market of Japan is on a steady uprise after the long and painful housing recession.

On the other hand, Takeo Higuchi, chairman for Japan's second biggest homebuilder Daiwo House Industry, was caught saying that the real estate market in Japan has become "dangerous".

So, there are always two sides of a coin, but for the moment, the Japanese real estate market is growing and seems to be a fairly attractive market to invest in.

on the assumption that Japan has a great deal of upside after their long and painful housing recession.

The recovery from the real estate bubble in 1989 for the moment have taken many years, but thanks to the introduction of Real Estate Investment Trust in 2000

ery few will remember the real estate bubble in Japan back in 1989 which was followed by a price decline of 70%. The recovery has just taken so long. It is only in the last few years, after the introduction of Real Estate Investment Trusts in 2000, that the real estate sector in Japan has started to recover from the after effects of the crash. The real estate sector is no longer the refuge of the Japanese mafia. Last year was a high watermark in the development of the real estate sector in Japan with a whooping 45% gain in the REIT index over last year beginning 1st March 2006 and ending in 28th February 2007. This was well above the average increase of 22.3% since the formation of REITs.

For investors who missed the rally last year, the question