*The "sell up and sit on a beach" overseas property strategy

In business timing can be everything and this is especially true for those of us working in the property industry.

For many of us, it would have been lucrative to take 18 months off around the middle of 2008. The “sell up and sit on a beach strategy” would have paid dividends had we had the benefit of perfect foresight.

Fortunately, an economist at Barclays Capital has come up with a theory to help out the next time property markets take a plunge. According to his data, the most reliable indicator of an impending real estate crisis is the construction of exceptionally tall buildings.

From the time the first skyscraper went up in New York in 1870 (Equitable Life) to the completion of the Empire State Building in 1931 and the construction of the World Trade Centre in 1972, great height has always co-incided with big trouble.

More recently the theory holds with Petronas Towers in Kaula Lumpa (1998), One Canada Square in Canary Wharf (1991) and the Burj Khalifa (2008) in Dubai.

The theory isn’t perfect and a correlation does not imply a cause but the co-incidences are uncanny.
In most markets we are years away from excesses of another property boom but if history teaches us anything it’s that people have short memories when it comes to property.

The next time someone begins building a huge white elephant project in your market, the wisest course of action may be to put up a for sale sign and reach for the sun lounger.

Source: Global edge

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