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- Economic Freedom = Open Real Estate Market?
- UK Tops Europe in FDI; Concerns of Economic Nationalism
- Welcoming Foreigners to Your Community
- Test Your Knowledge of Chinese Business Cultural
- New Study Reports on Reverse Immigration to Mexico, Panama
- Americans Living Abroad Get a Tax Surprise
- Industry News Translated into 11 Languages
- Eight Steps to Starting & Building an International Real Estate Business
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Whether the level of a country's economic freedom equates with an open real estate market can be debated on a country-by-country basis, but industry professionals who advocate investment in markets with a high level of economic freedom can look to the latest edition of The Heritage Foundation/Wall Street Journal Index of Economic Freedom. Designed to assist investors, policy makers, academics, and others interested in the link between economic freedom and prosperity, the Index measures 161 countries against a list of 50 independent variables divided into 10 broad factors (including foreign investment and property rights) of economic freedom. Low scores are more desirable; the higher the score on a factor, the greater the level of government interference in the economy, and the less economic freedom a country enjoys. Hong Kong ranked #1, followed by Singapore and Ireland. The U.S. ranks ninth (tied with Australia and New Zealand). Last on the list is North Korea. Click on each country in the online index for an overview and quick facts summary. PDF downloads available for each in English and Spanish. Read a press release on the Index.
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Britain is attracting a record number of foreign investors, creating 34,000 jobs in the past year, and is a favorite destination for the fast-emerging Indian market. Indian foreign investment projects in the UK increased a staggering 110% in 2005-06. During this period the UK recorded 76 investment projects from India (more than double from preceding year). India is the third largest investor in the UK, following Japan, in second place with 84 projects and, topping the list, the U.S. with 446 projects. This news came amid the UK's Trade and Industry Secretary Alistair Darling noting concerns about the growing threat of protectionism to global trade. The Secretary said the move towards "economic nationalism" came from not only the U.S. "but right across the world," and accused nations of "throwing up barriers rather than bringing them down." Read a speech on globalism Darling made to the U.S. Chamber of Commerce in June. The UK led Europe in attracting foreign investment in 2005 with inbound investment rising by 14%. Learn about business-to-business trade and investment between the UK and the USA, or read a summary of the UK 2005-06 Annual Investment Report.
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REALTOR® groups based in areas attracting in-bound immigrants should work with local governments or chambers of commerce to provide online assistance. A nice example is the Going to Canada web site, designed to inform, educate and assist individuals moving to Canada. Site services include documents and information about working in Canada, health care, immigration services, climate and more. A state or local site can be much simpler. Once section lacking at the primary Canadian site (although addressed in their printed booklet, "A Newcomer's Introduction to Canada," and available at the Canadian Mortgage and Housing Corporation site), is information on finding a place to live. If no such site exists in your area, or lacks information on purchasing or renting a home, work with the local government to develop a section/site. An ideal sponsorship opportunity for the local Board of REALTORS®!
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Statistics show that in the first four months of 2006, a total of 12,639 foreign-funded companies were set up in China, with the FDI up 5.7% to $18.48 billion over the same period in 2005. If you're doing any business in China--or with Chinese nationals in the U.S.--you may want to brush up on your business etiquette. Test your Chinese cultural aptitude with this short online quiz. Submit with your e-mail address and you'll be provided a percentage score. If you prefer to do your own scoring, click on quiz answers.
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While U.S. policy (and the real estate industry) is very focused on immigration from Mexico and Latin America into U.S., REALTORS® should be aware of a new Migration Policy Institute (MPI) study that identifies a reverse trend: increasing numbers of U.S. retirees moving to Mexico and Panama. With the U.S. Census estimating that the population over 65 in the United States will double by the year 2030, understanding trends in international retirement migration will become increasingly important to REALTORS® as baby boomers age. Highlights include: **1,036,000 Americans officially live in Mexico and 10,000 Americans officially live in Panama. **An estimated 70% of Americans living in Mexico own property there; for Panama, the figure is 50%. **Americans spend (on average) between $200,000 to $250,000 on property in Panama City and between $500,000 to $1,000,000 for property in San Miguel de Allende, Mexico--both popular retirement destinations. These figures are much higher than average second home price in the U.S. ($204,000) and attest to the tangible referral business that exists between NAR members and brokers in Mexico and Panama. Download the complete 72-pg. report, or an executive summary in English or Spanish.
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More than four million Americans live and work abroad--many of whom own property. While many Americans have received a tax cut, these expatriates recently got a tax hike. Federal lawmakers included a last-minute provision to a $69 billion tax cut bill signed into law in late May that retroactively (to beginning of 2006) raises taxes for Americans residing overseas. The new taxes has caught many by surprise and has multinationals worried about the additional expense of relocating workers. REALTORS® working as relocation specialists should take note. Although the decision will have minimal impact on Americans residing in foreign regions with steep tax rates, such as Europe, those residing in low-tax areas with expensive housing costs, e.g., Bermuda, the Middle East, and Singapore, will be hard hit. The bill increases overall taxes by around 6%. Although the majority of individuals will pay no more, some will see their taxes quadruple. According to the IRS, Americans residing overseas paid nearly $3.5 billion in U.S. income taxes in 2001. The change will increase taxes on Americans overseas by an estimated $2.1 billion during the coming decade. Read the full story from the New York Times, or access the IRS' internternational business and individual tax stats page.
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The ProQuest database has enhanced its article view to include eleven languages. ProQuest is a collection of more than 14,000 industry-related journals, newspapers and magazines--free to REALTORS® as an NAR benefit. Access ProQuest through REALTOR.org. To access a translated version when viewing a full-text article, look for the "Translate document into:" drop-down menu and then select your language of choice. Options include Spanish, Portuguese, French, German, Italian, Russian, Japanese, Korean, Turkish, and Chinese (Simplified and Traditional). ProQuest provides the translation in roughly 60 seconds or less. Translated version can then be printed or, in some cases, e-mailed.
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REALTORS® who have been wanting to diversify their business and expand into the global market can read an article by Luke Romero, CIPS, posted at the Houston Association of REALTORS® web site. Romero's eight-step primer is good, basic common sense, and a valuable quick-read for those who may have shied away from international business on the assumption that it is too difficult or too far off the basic business model to pursue. As Romero writes, "Most successful real estate professionals in today's market have already developed the basic components needed to expand into the international arena. By expanding and refining your existing domestic business plan, you can increase your client base and create new business opportunities."
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Report compiled by NAR International Operations, narglobe@realtors.org.
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