An ETF to Consider as Luxury International Real Estate Heats Up

With government debt around the globe at low levels, with some parts of the world experiencing negative yields, it’s a great time for luxury real estate investors to take advantage of cheap money to borrow. Three cities to watch are Paris, Singapore and Vancouver, which could boost the luxury real estate market on an international level—also a good sign for real estate ETFs with global exposure.

Per a Mansion Global report, Paris, Singapore and Vancouver are “expected to heat up, boosted by sweeping transit upgrades, increasingly robust tech sectors, and changing political conditions in their regions. In Paris, for instance, a multibillion-euro Grand Paris project is planned to improve transit and revamp metro stations, and anticipation of the 2024 Summer Olympic games is further helping to invite investment and development.”

“We’re catching up,” said Hugues de la Morandière of Agence Varenne, a Savills partner in Paris. “Paris had a slow period, but [President Emannuel] Macron has brought more activity to France, and Paris is a very good place for investors today.”

When it comes to investing in Southeast Asia, Singapore is seeing high interest from Chinese investors who are looking outside of their country for prime real estate opportunities.

“Investors consider Singapore real estate as a safe asset for wealth preservation and capital appreciation,” said Han Huan Mei, director of research of List Sotheby’s International Realty, Singapore. “Besides those top three nationalities, we see increasing new affluent buyers from developing countries, such as Cambodia, investing in Singapore.”

In Canada, Vancouver is in its recovery phase after experiencing a slowdown in high-end real estate due to a building boom and a high tax rate imposed on foreign buyers. However, that’s starting to turn with Chinese buyers, once again, looking at Vancouver real estate opportunites.

“Chinese demand was a huge driver of the luxury market, but it has pulled back significantly,” said Steve Saretsky, a Vancouver realtor who blogs about the city’s real estate. “Developers built a lot of new luxury single-family homes, and we were left with an oversupply. I think it’s going to be a better year for the luxury market, but there’s still a lot of supply to work through.”

International Real Estate Exposure with “HAUZ”

Investors who don’t have the capital it takes to invest in luxury real estate abroad can still do so via the Xtrackers International Real Estate ETF (NYSEArca: HAUZ). With a net expense ratio of just 0.10%, it offers investors a low-cost option to get into international real estate.

HAUZ seeks investment results that correspond generally to the performance, of the iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index. The fund seeks investment results that correspond generally to the performance, of the underlying index, which is a free-float capitalization weighted index that provides exposure to publicly traded real estate securities in countries outside the United States, excluding Pakistan and Vietnam.

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