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The Philippines property market is positioned to generate the strongest property price increases over the next 10 year thanks to ongoing economic and administrative reforms by the Arroyo government. The ASEAN countries have yet to exhibit the price gains of Western markets, which is just another sign that this super cycle is far from over. The current credit crunch will provide a great opportunity to profit from property foreclosures.

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Are you aware that you can buy a house & lot in Japan for as little as $10,000. Surprising but true! Japan is a large market, with a plethora of cheap properties up for auction by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. Some property is in rural areas subject to depopulation, but there are plenty of properties in the cities too. I bought a dormitory 1hr from Tokyo for just $US30,000.
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Sunday, December 30, 2007

Buying foreclosed properties

Buying foreclosed property is a sensible approach to securing real estate, but you should be aware they have their advantages and disadvantages - depending on the market circumstances. The advantages are:
1. Distressed prices - these assets are often being dumped into markets with no buyers
2. Bank indifference - Banks are primarily concerned with recovering their own money, thus there is some willingness to accept low-priced offers from prospective buyers
3. Under-utilised assets - foreclosed assets are often under-appreciated assets because the previous owner was unable to make a profit from it, or didn't have the chance
4. Foreclosed property assets often have a negative perception attached to them, whether its a fear of reprisals from the previous owners or threats by the yakuza (in Japan). This means you can get a low price because buyers are scared off.
5. Illiquid markets - Foreclosures tend to be dispersed across the whole country, which means you can get steep discounts in illiquid local markets because most of the buyers are in the cities. For retirees or holidayers this means they can get particular bargains away from the city.
6. Panic sentiment - The wall of fear gripping the market can create a wave of panic selling, resulting in steep discounts. This is particularly pertinent where their is perceived to be no value for the asset. eg. Vacant, unproductive land. Such assets can become compelling buying at the right price.
7. Limited disclosure - The limits placed on disclosure can drive down prices prompting many buyers to stay away. In Japan bidders are not permitted to enter the property. Most buyers are reluctant to bid on properties they can't look at. In the Philippines the information is very scant, and bank managers are less than service-orientated
8. Generous financial terms - Bidding on foreclosed properties requires a deposit of just 5-20%.
9. Financial literacy - In some markets buyers are less sophisticated than others, so foreclosures in these markets can be more compelling. The same of course is true on the selling side, where poor financial literacy increased the number of foreclosures (sellers). Financial literacy is particularly prevalent in the rural areas.

See http://foreclosured.blogspot.com for further information on specific market opportunities.

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'Buying NZ Property – Download the free sample readings!

The NZ property market is shaping up as one of the most attractive property investment markets for the next few years. High yielding property and the collapse of the NZD make NZ the perfect counter-cyclical investment if you buy right! In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

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