According to mortgage specialist Conti, property investors looking to snatch up houses overseas are sticking to proven, more traditional locations for long-term investment, according to NuWire Investor.

Locations of interest has France in the lead with 31% of inquiries received by the company, followed by Spain with 22%. Turkey remains in third with 13%, Portugal in fourth and Italy in fifth. Location interest is waning in countries such as Bulgaria and the United States.

• France. France has a relatively stable market. The country’s financial system is eager to lend to foreign investors, so much so that it may be possible to borrow up to 100% of the property value. Interest is low and many property sellers are still dropping prices.
• Spain. Buyers have a large selection of available properties and the benefit of low interest rates. But there are problems with exposure to corrupt licensing laws or land grab issues.
• Turkey. Turkey is situated in a nice Mediterranean location and overseas buyers won’t be up against a strong euro. Tourism is on the rise, which should increase demand for quality rental properties in tourist areas.
• Portugal. Portugal has seen a drop in interest rates and lower property prices, with some locations down 30%. Recently, the country reported an end to its recession.
• Italy. Italy can yield profitable acquisitions in more popular areas with international tourists.
• Bulgaria. Lenders have been in a bind with development and the market has a glut of  buildings. The result is a steep drop in valuations and banks are questioning asset security, which inevitably has lead to lower overseas demand.
• United States. The main reason overseas buyers look to the United States is because of a depreciating dollar, which has made properties cheaper.

• SPDR Dow Jones Wilshire International Real Estate (NYSEArca: RWX): up 36.4% year-to-date; France is 11.3%, Italy is 0.14%

• iShares FTSE/NAREIT Global ex-U.S. (NASDAQ: IFGL): up 41.8% year-to-date; France is 7.1%, Italy is 0.2%

For more information on the real estate sector, visit our real estate category.

Max Chen contributed to this article.

What’s more the S&P/Case-Shiller home price index shows that home prices have dropped 17.4% on average, and some areas were far worse off than others, reports Ron Rowland for Money And Markets. It is a matter of time before this spreads to commercial real estate as well. Many tenants have already evacuated, leaving offices and storefronts empty.

Rowland emphasizes is that real estate is cyclical: just look at the tech boom, when all that vacant space filled right up. The real estate tide moves very slowly, though, and timing is everything for investors seeking to profit on the industry’s waves.

The average investor found it challenging to get involved with real estate before ETFs came along: buying and selling isn’t always easy, and owning a lot of property can leave one very undiversified. ETFs are a better way to go because it is one of the fastest ways to get real estate exposure with superior liquidity. International real estate ETFs also offer exposure to China, Europe and other developed or emerging nations.

ETFs within this asset class offer transparency, clear pricing, low costs and efficiency/simplicity. And for the down markets there is a short ETF, designed to move up if the markets continue lower.

• iShares Dow Jones U.S. Real Estate (IYR): down 46.5% year-to-date

• SPDR Dow Jones Wilshire International (RWX): down 57% year-to-date

• ProShares Ultra Short Real Estate (SRS): down 12.6% year-to-date

With a growth figure of 0.0 is below even the modest estimate of 0.2. With a falling housing market, low consumer confidence and inflation out of control, the “R” word is looming.

Emily Flynn Vencat for Associated Press reports that the economists are calling for a recession, and data shows the British economy is doing worse now than it did during the second quarter.

The construction sector has been particularly hard-hit in the wake of Britain’s worst housing crash in 30 years.

• iShares MSCI United Kingdom (EWU), down 21% year-to-date
• NETS FTSE 100 (LDN), down 12.9% since April 10 inception

U.K. property stocks have fallen by more than half since Britain introduced real estate investment trusts (REITs) in January 2007. A glut of empty space in London could lead to a property recession, reports Peter Woodifield for Bloomberg.

Prices for offices in London have dropped 25% since last August and rents are declining for the first time in four years. Developers have been working on 160 trading floors of office space, with around 120 more due to be finished in 2010 – the worst timing possible.

• iShares S&P World ex-US Property Index Fund (WPS): down 25.5% year-to-date; 10.2% in the United Kingdom
• SPDR Dow Jones Wilshire International Real Estate (RWX): down 22.4% year-to-date; 13.4% in the United Kingdom
• iShares FTSE EPRA/NAREIT Global Real Estate ex-US Index Fund (IFGL): down 25.8% year-to-date; 11.2% in the United Kingdom
• iShares FTSE EPRA/NAREIT Europe Index Fund (IFEU): down 15.9% year-to-date; 36.6% in the United Kingdom

The Belfast region of Ireland is especially hurting from the recent credit crunch, and the economic growth rate has slowed to an estimated 1%. Last year, the province was expecting an economic revival of sorts, as the Catholics and Protestants declared peace, reports Colm Heatley for Bloomberg.

United Kingdom home prices fell as July consumer confidence fell to an all-time low as the country borders on a recession, says Brian Swint for Bloomberg. Average home values dropped 8.1% from the previous year. Falling retail sales, dropping home values, high food prices and credit tightening are weighing on the economy and real estate ETFs.

ETFs that are feeling the pain:

• iShares S&P World ex-US Property Index Fund (WPS): down 20.6% year-to-date; 10.2% in the United Kingdom
• SPDR Dow Jones Wilshire International Real Estate (RWX): down 16.4% year-to-date; 13.4% in the United Kingdom
• iShares FTSE EPRA/NAREIT Global Real Estate ex-US Index Fund (IFGL): down 20.5% year-to-date; 11.2% in the United Kingdom
• iShares FTSE EPRA/NAREIT Europe Index Fund (IFEU): down 13.5% year-to-date; 36.6% in the United Kingdom