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Les Calvert is the owner of and many other property and travel related websites. Les writes news and articles on the overseas property market for leading websites, trade magazines and newspapers.

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When Billy Ray Harris was spare-changing under a bridge in Kansas City earlier this year, Sarah Darling dropped some money into his cup, out of charity.

However, she also gave Mr. Harris an accidental bonus – her engagement ring.  Ms. Darling was wearing her ring earlier in the day, but began to develop a rash on her finger and removed the ring, storing it in her purse.  As a result, among the handful of coins Ms. Darling gave to Mr. Harris on that cold day was the ring her fiance Bill Krejci had given her to celebrate their engagement.

“It was horrible,” Ms. Darling said in interviews.  “It meant so much to me beyond just the financial value.”

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House Prices Have Supported Prosperity, But Might Be About to Fall

Canada has been one of the few major economies worldwide to avoid a housing crash in the years since 2008.  But some commentators call the strong housing market that has supported Canada’s enduring prosperity a bubble, and there are even signs that it may have already begun to burst.

In Vancouver, sales have fallen and listings have risen.  In August, the number of sales in the Greater Vancouver area fell by 21.4% from the previous month.  July saw a 11.2% drop from June, June a 17.2% drop from May.  In Vancouver the average house price is now 12% down from a year ago.  Additionally the rise in prices year-on-year was the smallest since 2009, and January 2013 saw the fifth month-on-month fall in prices nationwide.

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A row of London homes

For years, the property market in London was buoyed up by investment by foreign buyers, who regarded the city as a safe place to put their money during the financial turmoil following the 2008 crash.  But now, the city faces the threat of a bubble, according to Ben Habib, Chief Executive of First Property Group.

Between mid-2009 and the end of 2012, office space in London rose in price by 52%, and the luxury residential market grew at a similar pace.  According to the research group Real Capital Analyticals, commercial property deals reached nearly £21bn last year, and over 64% of the money coming into the market was from abroad, a rise from 61% in 2011 and 55% in 2010.

Amid fears of a breakup of the Eurozone and tax rises in the US, together with spending cuts and economic slowdown in China, the flow of money into London has slowed as concerns over the British economy have grown.

Britain’s economy shrank in the final quarter of 2012, and the country’s AAA credit rating could be in danger too.  The pound is weaker against the dollar than it has been for six months and that could make London a less welcoming investment environment.  As Jeffries real estate analyst Mike Prew puts it, ‘ prime London asset denominated in a secondary currency loses much of its investment appeal.’

Investment appeal is also divided between investors who are looking towards capital preservation, and investors whose concern is rental yield.  While the London market ha functioned well in terms of capital preservation its yields remain relatively low.  The West End market as a whole yields at about 5%, but some Mayfair properties yield under 4% and that figure is closer to 3% for some luxury developments.

The luxury residential market is suffering a hiatus as the effects of economic downturn percolate.  Several banks have made job cuts, leading to worries about demand strength, and some buildings are starting to drop rents to meet reduced demand.

It’s likely that investors will turn their attention to locations outside London.  Outside London and the Southeast, office values have dropped by 14% since June 2009, according to property consultant CBRE.  The gap in yields between West End London offices and property in the rest of the country is up to 10%, versus 1% to 2% before the 2007 crash.  There’s a sign that companies and individuals are “pressed against the ceiling’ of London’s property prices ” unable to spend less or earn more, many are seeking alternatives.

Not all observers agree that the property market in London is in danger, though.  Rightmove predicted a rising market over the coming year, saying that throughout 2012 the strength of London’s property market “stood out like a beacon against the rest of the UK.’  Nine of the ten regions whose prices Rightmove tracks saw property prices fall in December 2012 from the previous month and the only rise, in the East Midlands, was by 0.8%.

Frank Knight reported that London’s Kensington region continued to be popular with foreign investors, and Liam Bailey, Frank Knight’s head of global research, predicted that London would retain its safe haven status, and that this would encourage strong activity across all sectors of the housing market.  In 2012, 70% of London property sales were to foreign buyers, according to Frank Knight.

If London faces a bubble and the rest of the country faces stagnation, what does the future hold?  According to the financial management company PRUPIM, there could be a return of money to the very southern European markets that so recently saw investors flee to Britain.  At least one foreign investor is still interested in the London market, however: PRUPIM recently sold an Oxford Street block to a private foreign investor for £14.8m, reflecting a net initial yield of just over 3%.

Photo credits: Henry via Flickr

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China’s emerging middle class are increasingly leaving the country to live abroad, according to the most recent statistics.  In 2010, 508,000 Chinese left for the 34 countries that make up the Organization for Economic Cooperation and Development.  In 2011, the United States received 87,000 permanent residents from China, up from 70,000 the previous year, indicating that 2011, for which figures are not yet available, will show an increase in the numbers leaving China.

To some extent this is a result of their highly regimented society coming to more closely resemble that of other large, powerful free market countries.  As the economy and society were liberalised  the housing market boomed and pushed the price of an apartment beyond many people’s grasp.  At the same time, unemployment soared and a generation gap has appeared, as children find themselves more attuned to the new society’s mores and expectations than their parents.  There’s a feeling amongst middle class Chinese that the world is changing too fast.

Some are leaving because China feels instable to them.  A new Chairman of the one-Party state’s governing Communist Party, Xi Jinping, is due to be installed on November 8.  His policies are uncertain, and Chinese professionals are becoming more aware of the precariousness of affluence without influence.  The next government won’t be chosen by elections as we understand the term.  Cao Cong is an associate professor at the University of Nottingham’s School of Chinese Studies who has studied patterns of Chinese emigration.  He observes that middle class Chinese “don’t feel secure for their future and especially for their children’s future€¦ they don’t think the political situation is stable.’

The Chinese middle class is as ill defined as any other – an income of $10k is one standard.  The term is usually taken to refer to a cohort that eats out, owns a home and a car, and is conscious of foreign brands and foreign ideas.  In a highly conformist society the 100 to 150 million people who make up this group behave in public, but in private they can be highly critical of China.

One reason for this is that the Chinese middle class are unlikely to have the positive experiences of the American middle class; the resource-stripping that has powered the Chinese economy’s phenomenal growth up to now is clearly unsustainable, and in its place “cleaner’ modes of living are being proposed.  The word “green’ doesn’t sell well in China, but that’s what’s meant by those who put forward plans for more vertical dwellings, more shared services with an emphasis on access rather than ownership and more ecommerce and elearning to cut down on costly and environmentally detrimental commuting.  However, all these things sound like a return to China’s collectivist past and many Chinese with valuable skills see the chance of a better life lying elsewhere.

There’s additional reason to feel concern for even basic safety in China.  Earlier this year evidence emerged that one of the most senior figures in the Communist Party, Bo Xilai, operated a personal fiefdom involved in extortion, torture and murder.  Liang Zhai, a migration expert at the university of Albany, says, “people wonder what’s going to happen two, three years down the road.’

Many middle class Chinese children have been prepared from childhood to go to the West.  Regimented lives of English Conversation lessons and English names, piano and extra maths are meant to result in a young adult who might go to America to study.  But increasingly it’s not just these children or their professional parents who are leaving China.

Zhang Ling owns a restaurant in Wenzhuo, a coastal city in China.  He and his blue collar extended family pooled their resources to send his son to high school in Vancouver, Canada.  The plan is to get him into a Canadian university and obtain permanent residency.  Potentially the rest of the family could move overseas: “It’s like a chair with different legs,’ explains Mr. Zhang.  “We want one leg in Canada just in case a leg breaks.’

Photo credits: Faungg via Flickr

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Sothebys Canada

Ned Goodman’s 360 VOX Corp. has made a move into the real estate market with the purchase of Sotheby’s International Realty Canada.  360 VOX Corp. said it had entered into an agreement to acquire a group of Canadian real estate businesses, including Sotheby’s International Realty Canada, Sotheby’s International Realty Quebec, and Blueprint Global Marketing.

According to a release, the group is involved in ‘listing, marketing and selling real estate,’ including condominium developments resort properties and homes.  Sotheby’s specializes in high-end residential properties.  Blueprint Global Marketing works with the Sotheby’s International Realty, listing and selling international developments.  The group’s roster includes some 300 high-end real estate agents that the merged entity hopes will grow to be 1,500 or more in the next few years.

Mr. Goodman, who owns 24% of 360 VOX, has been said by someone close to the deal to have helped shape it.  The deal will see the transfer of $3.65m in cash and 54.25m common shares in 360 VOX, which is about 27% of the company’s issued shares prior to the transaction.

Though Mr. Goodman doesn’t appear to share their concerns, the Canadian housing market has some analysts worried.  Ottowa ordered alterations to the terms and conditions of mortgage loans in July this year, reducing the repayment period to 25 years and reducing the cap on home equity loans from 85% to 80%.  Additionally there’s been overproduction of housing in Canada, with building outstripping the formation of new households.

CIBC’s Avery Shenfeld sees the combination of ‘recent changes in mortgage insurance rules, lofty prices that make taking the plunge a bit less attractive (particularly for speculators), and the end of a catch-up period in which construction has outpaced the trend in household formation’ to result in a slowdown of the housing market by 2013.  However, CIBC’s Benjamin Tal says Canadians shouldn’t expect a ‘US-style housing meltdown.’

Mr. Tal covers the data showing the disparity between Canada’s house prices – which he says ‘continue to defy gravity’ and Canada’s household debt, which is now at 163%, the kind of level seen in the US before the 2008 crash.  However, Mr. Tal goes on the offer an alternative analysis, observing that debt-to-income measurements alone are a ‘headline grabber,’ rather than a ‘serious analytical tool,’ and that over the past decade housing starts exceeded household formation in Canada by about 10%: ‘In the US, the gap during the decade leading up to the crash was almost 80%.’

However reassuring Mr. Tal’s analysis is, there’s less comforting news coming in from the market.  Home sales fell 15% in September, to their lowest level since 2001, and there’s trouble on the horizon for the Canadian banking sector too.

Ratings agency Moody’s Investor Service placed almost all of Canada’s major banks on review for a downgrade on Friday, based on its concerns about the country’s mounting household debt levels.  Institutions like the Bank of Montreal and Toronto-Dominion Bank are facing downgrades over concerns Moody’s describes as ‘concerns about high consumer debt levels and elevated housing prices, macro-economic risks, capital markets activities and bank-specific factors.’  Moody’s vice-president, David Beattie, said in a statement that Mody’s saw the banks as ‘more vulnerable to increased risks to the Canadian economy.’

However, Robin Connors, the CEO of 360 VOX, sees things a different way: ‘The markets are in flux,’ he says, ‘but the industry is reinventing itself.’  Mr Goodman agrees, saying that he sees the recreational property sector as a good opportunity in its own right, and thinks it will eventually meld into the wealth management industry.  And Mr. Connors points to 360 VOX’s investments in ski-in, ski-out developments in the French Alps, which analysts predicted would end in disaster.  ‘People said, ‘You guys are out of your minds, European markets are in the bucket’,’ Mr. Connors recalled.  But the first phase of that development sold out, proving ” to 360 VOX at least ” that their customers are still ready to spend.  ‘Those people are still buying,’ Mr. Connors notes.

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Wind Tower I and II Dubai

Development in Dubai froze or stalled in many cases following the 2008 crash.  But gradually, Dubai’s property market has started to recover and stalled or partially shelved projects are returning.  Dubai’s property market has climbed steeply this year – while it did not make gains comparable to the pre 2008/9 boom years, but still represented among the sharpest gains in the property sector globally this year.

This week three of Dubai’s stalled projects were restarted: two in Jumeirah Lakes Towers and one in Business Bay.  They have been revived under the Dubai Land Department’s (DLD) Tanmia initiative.

The Director-General of the DLD, Sultan Butti bin Mijrin, told Emirates 24/7 that “we have approved two projects Wind Tower I and II under Tanmia.”  He went on to explain, “we are working with more investors on a number of projects.”

The project in Business Bay has been taken over under the Tanmia initiative by Pacific Ventures and has been renamed Burj Pacific.  Pacific Ventures has confirmed that the project will be relaunched this month.  “We recently took over one project in Business Bay,” Parvez Khan, the Chairman of Pacific Ventures confirmed to news website Emirates24/7.  “The majority of the original investors have agreed to continue with our project.  We have new contractors on site and work has commenced.’  Burj Pacific is a 21-storey residential tower, comprising 150 apartments and penthouses.  The project is due to be completed by 2015.

Mr. Khan’s company told Emirates24/7 in June that his company was planning to spend Dh50m over a two-year period to take over projects listed under the Tanmia scheme.  Tanmia – Arabic for “development’ – is the DLD’s scheme, launched in September of 2011.  It’s aimed at getting semi-government and private investors on board to get stalled or endangered projects completed.  Currently, the development is auditing over 100 projects.

Majida Ali Rashed, Senior Counsel Strategy, DLD, has said that the Tanmia initiative will continue to operate for three to four years, but warned that the process would not be easy.  “The scheme targets the government and private sector and will help them benefit from these projects, but it is not an easy task.’  Part of Tanmia’s remit to settle all pending issues and revitalize stalled real estate projects will be to audit the accounts of projects.  Property developers and investors can approach the DLD to seek inclusion of their project under Tanmia, but, as Mr. Rashed points out, “We have to look at all the legal, technical and financial aspects before allowing another investor/developer to take over the project.”

Pacific Ventures, Mr. Khan’s company, has already taken over two projects in Jumeirah Village Triangle.  These projects have also been renamed, as Pacific Residencia and Pacific Edmonton Elm.  The company is also on track to take over a project in Dubai Sports City.  Mr. Khan says that the majority of the “old’ investors in the Edmonton Elm project have decided to continue investing in the project, though ’15 per cent are defaulters… we will seek cancellation of their contracts through proper legal channels.’  The Pacific Residencia project’s building is over 40% complete and the project’s original investors have overwhelmingly decided to stay with it.

Despite the good news from Dubai’s housing market and the organizational aid from Tanmia, the future may not be entirely rosy for the Dubai property market.  A boom in building luxury apartments has meant that the residential market in Dubai is unduly weighted towards a cohort of high earners who aren’t there – there’s approximately a 15% oversupply in this area.  However, this may to some extent be made up for by the increase in value of midrange properties – up 20% in the last year, according to economist Farouk Sousa – and a “misfortune dividend’ as the chaos of the Arab Spring makes Dubai’s stability desirable.

Ho Chi Minh City Vietnam

Vietnam’s property market was once one of Asia’s hottest.  But in recent years it has cooled and officials blame both speculation and banking practices for the constriction of the sector’s financial arteries.

Vietnam’s property market is the country’s most popular sector for foreign investment, according to online newspaper VietnemNet.  Data released by the National Finance Supervision Council showed $9bn of foreign money invested in Vietnam in 2011, and 52% of this found its way into the property sector.

However, Vietnam’s economy has not remained immune from the events of the outside world.  Low demand has resulted in weak liquidity, and high inventories continue to restrict economic activity by holding investors back from paying their debts.  Many businesses faced bankruptcy or closedown due to issues concerning high inventory and debt, and the industrial index declined markedly in 2011-12, falling 21% between January 2012 and January 2013.  Although Vietnam’s long-term outlook remains bright, with the country tipped by HSBC to become the world’s 41st largest economy by 2050, the immediate future is problematic.

As far back as August of 2012, Vietnam’s property sector experienced a crash one official compared to the 2007 crash in Thailand.  Hua Ngoc Thuan, chairman of the People’s Committee of Ho Chi Minh City, layed the blame at the feet of property speculators who he said had ‘pushed the prices so high.’

The bad debt issue is also a major worry for the Vietnamese economy as a whole.  Jonathan Pincus, an economist in Ho Chi Minh City, warned the Economist that the banking crisis ‘is going to constrain growth for a serious amount of time unless it’s dealt with.’

The seriousness of the bad debt problem in Vietnam is underlined by the State Bank of Vietnam’s upwardly-revised estimate of the bad debt in the country’s banking system, at 8.8%; that’s already the highest in South-East Asia, but the bank Standard Charter puts the figure at between 15% and 20%, perilously close to the 20% national credit cap and consequently posing the danger of paralysing the banking system.  After Dr Tran Du Lich of the National Financial and Monetary Policy Advisory Council used the phrase in 2012, the combination of bad debts, poor liquidity, inappropriate regulations and long-lasting large inventories is now commonly called Vietnam’s ‘blood clot.’

For foreign buyers Vietnam presents several unusual obstacles.  It’s impossible to own land there, it must be leased from the state, and the mortgage rate is 13%, set deliberately high to cool a roaring market and combat Asia’s steepest inflation rate.  Additionally, property purchases will usually be conducted not in dollars or in the Vietnamese Dong, but in gold.

With the difficulties mounted against them it might seem no wonder that foreign investors are less involved in the Vietnam property market than they were recently, but it’s unlikely to be the peculiar regulatory environment that has deterred them.  More probably it’s a property bubble that has just burst, with such overinventory that Nguyen Duy Lam, director of construction and real estate company Pacific Real, told the New York Times that ‘everyone wants to sell, but they can’t even if they lower the price.’

The State Bank of Vietnam (SBV) is trying to use injections of foreign capital to rescue banks it thinks worth saving while urging others to merge.  Some Japanese banks have taken an interest and the SBV has submitted a draft decree to allow foreign investors to take up to 30% interest in Vietnamese banks, up from the 20% limit at present.  Following a European lead, the Vietnamese government has also announced plans to set up a ‘bad bank’ to handle all the sector’s bad debts.

However it comes about the property market in Vietnam is not expected to recover without reform of the Vietnamese banking sector, and this will take time.

Photo credits: Marcel via Flickr

Florida Condos on Sunlit Harbour Island

A decade ago, Florida was a hotspot in the US-wide housing market furnace. Across the country house prices rocketed but Florida saw one of the sharpest rises nationwide.  Ten years later, the aftermath of the 2008 meltdown has seen Florida’s foreclosure rate top out above even Nevada.  While the housing market nationwide has become a rare economic bright spot, Florida is still recovering.

The foreclosure rate across the US as a whole seems to have peaked in 2010 and has since begun to fall even in hard-hit Nevada.  But in Florida it continues to rise.  Florida cities account for eight of the top 20 metro areas for foreclosures.  The Orlando-Kissimmee, Lakeland, Jacksonville, Tampa-St. Petersburg and Melbourne areas of Florida all have at least 28 months’ worth of foreclosed properties for sale and foreclosures account for at least 24% of all sales.  Most tellingly, foreclosure activity increased at least 50% last year.  And in the Palm Bay-Melbourne-Titusville metro area, tipped by foreclosure tracking firm RealtyTrac to be the best place to buy foreclosures in 2013, foreclosure activity rose 308%.

All this hasn’t necessarily resulted in a cheaper market on the ground.  As prices have fallen and a spate of vacation homes has hit the market, there has been a return to home flipping, in which developers buy up properties cheap and sell them for a quick profit after carrying out improvements.  Over a year ago, Warren Buffet said that family houses were ‘as attractive an investment as you can make,’ and RealtyTrac says plenty of companies and individuals have been following his advice.  During the same period that foreclosure activity roles 50%, flipping activity rose 25% as giants of the industry like the Arizona-based Colony American Homes bought up housing and resold it, on average for a $29k profit per property.  Many of the homes are being bought to be rented until prices rise, when their equity can be realized by sale.  In the meantime they’re helping to improve the housing markets across Florida:

The slow rate of foreclosure proceedings is partly to blame for the explosion in foreclosures.  Some cases spend four years going through the system to foreclosure.  In fact, there’s a proposal going through the State Legislature that would give lenders only one year, instead of the current five, to pursue a judgement against a homeowner in foreclosure cases.  And since Florida contains five of the ten places named by RealtyTrac as the foremost places in the US to buy foreclosed property, it sounds like the sort of measure calculated to be popular with the banks that own the properties.

However, the proposal, HB 87, would require that the banks came to foreclosure cases with all their paperwork in order.  ‘We’re telling the lenders, don’t bother filing the complaint unless you’ve got it right,’ says Rep. Kathleen Passidomo, R-Naples.  ‘It’s got to be done right.’   The bill passed the House Civil Justice Subcommittee by a 10-3 vote.

Many banks see this requirement as making the proposal work against them.  That’s because many homes have been bought by other banks since being leased or sold and the deeds, promissory notes and other paperwork can be scattered to different institutions across the country.

Amidst the arguments over HB 87, the legal fights over individual foreclosures and the mass corporate buy-ups, is there room for a small investor or purchaser?  Yes, but it’s a more complicated and competitive market than a cursory glance would suggest, for the reasons we’ve gone over.  Anthony Askowitz, a broker with RE/MAX Advance Realty II in Miami, FL, elaborates: ‘The inventory of the foreclosures market is very low.  It’s highly competitive for a foreclosure or a property put out as a quote ‘good deal’.  Multiple offers is the norm.’

Photo credits: Matthew Paulson via Flickr

Bangkok City Skyline

Thailand has been a popular destination for tourists and expatriates for over three decades.  Over this period  it has experienced an extended property boom, which has been particularly concentrated in the Bangkok Metropolitan Region (BMR).  The BMR contains 17% of Thailand’s population and accounts for 44% of its GDP.  Household incomes there average 42, 000 baht, nearly double the Thai national average, and demand has grown along with supply as Thailand urbanized.

The recent trend has been for developers to look further out from the centre of Thailand’s economy, finding provincial sites.  One reason for this could be a slowdown in the BMR property market as it reaches saturation.  Typically 80-100, 000 new units are sold each year, but the absorption of new housing units has flattened off at 35-40% and inventory levels are struggling.

As in many Asian markets prices are rising faster than income growth.  Although Bangkok is no Hong Kong in this regard, it is experiencing an affordability problem.  As in Hong Kong the response from developers has been to downsize already small living space, but many Bangkok apartments are already 20-30m2.  Additionally, a smaller number of condominiums than expected were built in 2012 and the numbers are expected to fall further this year.  Of those built, 54% were in suburban areas of Bangkok and the trend for decentralisation is expected to continue both locally and nationally.

While the mass market may be saturated there is still strong demand for highly desirable locations along the proposed skytrain route, and competition in this market is intensifying.  As it does so, developers are climbing aboard the bandwagon and presenting their products as tailored to a luxury-oriented foreign market, in line with the conclusions on the importance of branding drawn by Rinchumphu et al in the International Real Estate Review.  Other developers devote themselves to the foreign market which they claim is booming.

Another reason for the withdrawal of developers from the BMR could be the blows to consumer confidence caused by the 2011 monsoon floods and the recent political unrest in Thailand.  The floods in particular pointed up a key concern for the BMR area: it’s located around the mouth of the Chao Praya River and is very vulnerable to flooding.  It’s also built on an alluvial flood plain.  As a result of aggressive groundwater extraction, Bangkok was sinking at a rate of 10cm yearly in the 1970s, and even now is sliding into the Gulf of Thailand at about 1-3cm yearly.

Additionally the sea level in the Gulf is expected to rise between 19 and 29cm by 2050 as a result of global warming, leaving BMR residents with the unwelcome prospect of a 4m descent by 2050.  The World Bank expects Bangkok’s flooding risk to increase fourfold by mid-century, and experts agree.  ‘In 50 years,’ according to Mr. Anond Snidvongs, a climate change expert at Chulalonkorn University, ‘most of Bangkok will be underwater.’

There are further troubles ahead for the Thai contruction industry, too.  The Thai government is currently drafting the third round of the country’s zoning laws.  Based on information collected in 2004, these reallocate much suburban land to agricultural purposes, and have been attacked for being out of date and restrictive to development.  The Thai Industry Minister Prasert Boonchaisuk said at the start of the month that he had asked the Interior Ministry to reconsider its plans.  In an especially harsh blow for urban Bangkok the new plans will include restrictions on the height of new buildings, slowing condominium production further.

The Stock Exchange of Thailand (SET) has risen recently and there are other promising signs including the Thai government’s commitment to a gigantic, nationwide infrastructure project that will see $77m spent in the next decade and will include several new mass transit systems, opening suburbs to development.  However, the old model of strongly centralized urbanization in the BMR is probably gone permanently, despite sales talk to the contrary.  David McCauley, the ADB’s chief climatologist, puts it more bluntly: ‘There is no going back.  The city is not going to rise again.’

Photo credits: Mike via Flickr


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Barbie has lived in Malibu since the 1971 introduction of Malibu Barbie.  But now she has made a bold move, from the sun and sand of California to 25,000 square foot Berlin townhouse.

Of course, the bold move is really by Mattel, owners of the Barbie brand.  The Malibu mansion was listed with real estate website Trulia for $25m and a member of a real estate realty show’s cast has been hired by Barbie to handle the listing.  Since Barbie retains the number one position for dolls, companies and brands were eager to collaborate with Mattel’s stunt.  Not only was it a bold, creative marketing move, but you have to admire the chutzpah required to put a $25m tag on a one-room house with a wall missing.

But the Berlin Barbie Dreamhouse is entirely real, at least in the sense that it will occupy 25,000 square feet of Berlin real estate.  The multi-storey mansion, bright pink throughout, is expected to open in March.

According to promotional material ‘dreams will come true’ – ‘You want to be a model or a pop star, we will show you how.’

Visitors will have the opportunity to make customised digital cupcakes in Barbie’s kitchen, visit Barbie’s walk-in closet and digitally try on clothes, check out the enormous four-poster and parade in a Barbie fashion pageant.  Each room will feature themed activities.

The Barbie Dreamhouse is intended to cement Barbie’s place in the doll firmament.  When she was created in 1959, Barbara Millicent Roberts was modelled on a German doll, Lili, whom her creator had seen while on holiday.  She swiftly acquired a dominant position in the doll market.  Fifty years on, 90% of girls between three and ten years old own a Barbie, but the company isn’t resting on its laurels. ‘There are so many toys for girls today, and the Dreamhouse is about bringing Barbie to life,’ said Sarah Allen, a spokeswoman for Mattel in the UK.  ‘We’re constantly trying to reconnect.’

In 2009, Barbie’s 50th birthday celebrations saw a lifesize recreation of one room, in California, but the Dreamhouse is on a different scale from that.

And the Barbie brand faces stiff competition from rival dolls Bratz €“ literally; prior to 2013 Bratz dolls had no arm joints.  In 2013 Bratz owner MGA Entertainment will attempt to build up the 40% market share of Bratz by increasing their height to match Barbie’s.  There may be records, movies and spin-offs, but as yet there is no Bratz house.  Barbie is the queen of plastic real estate.

The event agency behind the house itself is EMS Entertainment, whose Christopher Rahoffer told Das Spiegel that ‘we want to allow fans to spend an entire day in the fantasy life of their icon.’  It’s likely that the house will go on tour, spending time at other German destinations, but EMS are ‘very pleased that we have the Barbie Dreamhouse  in Berlin for the first worldwide opening,’ according to company director Thomas Ladicke.

The news follows on the heels of other Barbie promotional stunts.  Not only has Barbie sold her Malibu home to move to Berlin, but she’s added to her portfolio of careers by trying out in Silicon Valley, and Mattel announced in December that Barbie would be taking those nails to construction sites in the near future as she takes up the building trade.

Barbie is expected to take a hands-off approach to the construction of the Dreamhouse, which is planned for one of three areas in Berlin with no final decision yet.  It’s possible that it will be built on the site of the old Berlin Zoo ferris wheel.