While the US is struggling with its sub-prime problem, many investors from the US, and UK are looking towards investing in the emerging markets like Brazil, Russia, India and China. Given that their property prices have already skyrocketed, how much more upward momentum is there for the property market in these markets?

It is understandable that property prices in China and Russia where there are many noveau-riche sprouting up on a daily basis. The high costs of construction in places like China has also driven property prices in popular cities and in the regional capitals upwards. Traditionally less popular spots like Tianjin, Kunming, Shenyang have seen prices hike by more than 30% over the past year, according to South China Morning Post.

Many overseas chinese are also moving back to China in the past few years when China’s economic growth proved too attractive to ignore, and coupled with the central government’s steps to attract the “lost talents back to the motherland”. China’s recent economic boom also attributed to the 2008 Beijing Olympics has seen a sudden spurt in construction efforts in the country’s capital.

China, Russia and India are all such large countries, and when assessing the country’s property market we should look at the broad direction of the market, but still much research and assessment has to be done on the micro-level. In the current inflation levels especially in the commodities market makes real estate a much better bet for investment. Many real estate investors from the US and UK are trying to divest their real estate portfolios into these countries.

In my opinion I am still optimistic about China, even though property prices in Shanghai and Beijing have been maintaining high price levels for some time. I believe that after the Olympics are over, the property market will stabilize further with some consolidation. But with some anticipated growth, given the infrastructure improvements because of the Olympics is bound to attract more companies to relocate their manufacturing facilities there.  The central government in its recent sitting also revised its growth estimates down from double digit growth to between 7-9%. As they anticipate the global economic slowdown affecting manufacturing output and increased raw material and fuel costs affect business profitability. Despite all these gloom and doom news, we’re still optimistic on Asia, specifically in Singapore, Thailand and Vietnam where there are active measures to curb inflationary pressures, and attractive incentives for foreign direct investment are key to the region’s positive economic viability in the medium term.