WHERE in the world should investors buy property? Even if there is an improvement this year on the past 12 months, the search for new opportunities is strictly for the brave.
There is no guarantee that the first into the property recession will be the first out. The severity of the property downturns in the United States and Britain - which entered the downturn well before Japan and continental Europe - is so bad that recovery is likely to be slow and halting.
Less mature markets also promise a rocky ride. The emerging markets of central and eastern Europe are driven by political and legislative difficulties and even the fast-growing markets of Southeast Asia are suffering from over-supply.
The increasingly global flow of funds in the 1980s allowed banks and investors to export property booms from one market to another. At the same time, the rapid expansion of the financial services industry set off periods of heady construction in New York, Tokyo and London.
The result is that the world's biggest cities are full of empty offices. More than a fifth of all office blocks in the City of London, Sydney, Melbourne and Perth and the US are empty. Paris is heading towards a vacancy rate of 10 per cent. In Germany, and even Japan, which have had the lowest vacancy rates in the world, rates are creeping up significantly.
Rising interest rates towards the end of 1989 dried up liquidity and burst the bubble, leaving an oversupply of buildings, rapidly falling prices, a shortage of capital and credit and a near-crisis in the banking industry, which had lent heavily to the sector.
