Real estate bust evident

Growing evidence of real-estate ‘bust’
Fallout for consumers and corporate profits, eonomist says
By Chris Oliver, MarketWatch
Last Update: 11:35 AM ET Jun 29, 2006

HONG KONG (MarketWatch) — Evidence is mounting that the global property cycle is turning down, as rising interest rates and heightened inflationary pressures combine to put the brakes on demand for real estate, according to a Morgan Stanley report.
The shift ushers in an end to what’s been a six-year rally during which the twin forces of globalization and financial innovation fed an upturn in the property cycle that became a worldwide phenomenon, said economist Andy Xie, in an Asia Pacific strategy report released Thursday.
“Due to deflation shocks, global inflation has been low, which allowed major central banks to keep interest rates very low, in turn fueling property,” Xie said. “As inflation picks up simultaneously around the world, interest rates are rising everywhere, and the property boom is turning into a bust.”
The economist singled out Japan’s real-estate market as a notable exception, but he cautioned it might not be far behind in following global prices downward.
Two San Diego real estate sites of note are: downtown San Diego real estate and San Diego for sale by owner.