A couple of weeks ago, I read the intriguing interview Lcdo. danZenie gave Lcdo. E-Double and he asked "What would you invest in?" (not verbatim) and E said international real estate market. I would like to open a debate if I may...

Allow me to focus on US real estate markets: A couple of cats talk about how "You can NEVER lose with real estate""The value of land will never depreciate". People tend to forget their history. People forgot the 80s when the real estate market hit record lows due to overspeculation fueled by the S&L crisis. The same overspeculation has been feeding the frenzy from the late boom of the 90s to now spanning from Thailand to Lebanon from Spain to Panama and the US. Will '06 be the year the bubble burst? I am not an economist by any means so I can't make a prediction, but I do believe the market will have to rebalance itself.

What is currently indicating the bubble might bust? The interest on the 10-yr T-note has been steadily increasing, and sales of existing and new homes have been falling since Fall '05. In addition, the FED is going to have to raise the short-term interest rates (I'm betting on it), in order to wrestle with the forever looming inflation. On top of that, you have the huge credit debt that the gov't, corporate and household are holding. To sum it up, '06 may turnout a whole lot more bankruptcies and foreclosures, and in retrospect a lot more houses on the market.

How does this affect international real estate market? Once the giant of this sector falls, all others would follow.

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