Given that US RE is likely to be off the "must have" list for a year or two, or more then what is the next good emerging RE market. The other factor to consider is where the RE host countries currency is in it's cycle. ie low RE price plus currency near bottom of cycle = good pickings.
IMO Germany is the best value real estate in the developed world. Safe property rights, cheap prices (land prices are significantly lower than 10-15 years ago), high yields. The mortgage market there is fairly conservative but liberalising, which should be a long-term boon for prices. In addition, almost half the population rents, so there is a massive potential supply of future buyers as credit becomes more widely available. I know someone who bought a plot of land there for 60,000 Euros last year - it last sold in 1997 for 230,000 Euros. That is a pretty good bargain.
Good point Cutten. I am wondering if anyone is tracking RE cycles and currency cycles to show OB/OS conditions in different countries. Then of course you need to checkout title security and tennant rights etc.
I live in central Canada and the average home price in my city was up 51% year over year for July, hottest in the country. Residential real estate across western Canada has been going through the roof. Price appreciation is slowing, but still growing. I probably wouldn't buy now, but with $8 wheat, I'd like to buy some raw farmland. Also a good hedge against a US dollar in free fall.