August 13, 2006 at 8:39 PM #7195powaysellerParticipant
Oil sheiks are looking for places to put all those extra dollars they are getting for oil.
What do you think of this guy’s idea that they will scoop up real estate as it starts falling? I think they may want prestigious commercial properties, but not residential properties. I’ve not heard of this guy before. Cliff Droke on Real Estate
“Who controls much of the real estate in this country? Many would be shocked to discover the vast amount of lands and commercial and private buildings owned by foreigners, particularly Arabs. According to the Cape Cod Times foreigners now own 1.53 trillion dollars worth of factories, office buildings and investments. European nations control two-thirds of direct investments in the U.S. and the Middle East controls 9.3 billion dollars worth of direct investments.
With fresh gains from the oil bull market, Middle East investors are now looking toward the U.K. to invest their wealth. An article appearing in the May 2 edition of the Financial Times of London illustrates this point. It was stated in it that a consortium of Middle Eastern investors is poised to buy one of London’s most prominent office buildings this week, the Shell-Mex House on the Strand. The article went on to say that Middle Eastern money accounted for 11 percent of the total foreign investment in U.K. commercial property, compared with just 4 percent in 2004.
Foreign investors are salivating over the prospects that the U.S. real estate prices will come down at least somewhat this year in certain regions so they can step in and buy up prime locations as the trend toward foreign ownership continues to accelerate. This is another reason why the bubble won’t be allowed to collapse outright. ” – Cliff DrokeAugust 13, 2006 at 11:18 PM #31862La Jolla RenterParticipant
Sounds a bit like the late 80’s when foreign investors, specifically Japanese, were in a US buying frenzies.
I remember reading the “hot” book of the 80’s… bankruptcy 1995.August 14, 2006 at 9:36 AM #31870studenteconomistParticipant
We just talked about this last week in my internation finance class. Residents of the middle east only control about 4% of all foreign direct investment in the US. This is nothing compared to Europe. Even if it increases quickly right now, they will not be able to stop a slowing market. It is simply not a large enough pool of money to make a difference.August 15, 2006 at 6:57 AM #31918powaysellerParticipant
Does your professor think the Saudi oil money is not invested directly, but via UK? If you look at Saudi Tbill purchases, they are flat, but the UK purchases have tripled. Brad Setzer, of Roubini Global Economics, suspects that it is Saudi money. Where else will they put all those extra dollars? I got an e-mail from Money and Markets, and that guy actually fell for the diversion, and said “Saudi Tbill purchases remain constant at $13 bil”. I would expect better research from a financial advisor.
What does your professor think about the sustainability of foreign financing, and whether our exports will eventually increase to satisfy a consumption oriented China? Will they start buying agricultural products from us?
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