Bric lead global realty market into recovery

Brazil, Russia, India and China (Bric) are leading the global real estate markets into recovery, according to Jones Lang LaSalle.

"Their combined economies are projected to expand by eight per cent in 2010, reinforcing their position as the growing economic and real estate force. In China, India and Brazil domestic-led expansion is boosting real estate demand across all sectors, but particularly for residential," the global consultancy said in its global market perspective report.

China and India, home to some of the world's most dynamic cities and real estate markets, are both motoring strongly with annual gross domestic product (GDP) growth rates of 11 and 7 per cent, respectively. Aggressive stimulus plans and easing of monetary policy have been highly effective in boosting domestic demand, although this is beginning to create distortions and concerns about potential real estate asset price bubbles.

Brazil is benefiting from structural reforms, which have led to macro-economic stability and improving sentiment among real estate investors.

The Russian market, which has been severely impacted by the recession, is beginning to bounce back in some areas. Domestic players have continued to dominate the Bric investment and leasing markets over the past year. A return of foreign activity is likely in 2010 as risk appetite grows, at least for Bric's Tier 1 and 2 cities, with Tier 3 and 4 cities considered too high a risk at present.

Longer term, the much discussed burgeoning middle classes will fuel further real estate expansion, particularly for residential, retail and warehousing.

Economic growth is solid in both China and Australia, and has rebounded in the United States and Japan, but Europe remains in neutral to negative territory.

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