Warren Buffett returns to US housing market, predicts market recovery

Warren Buffett, the American billionaire and investment guru, is returning to the property sector, with investment in US housing market, by using his fund Berkshire Hathaway to obtain a majority stake in a US estate agent and other housing-related ventures. Warren Buffet feels that the property market is on its recovery mode.

“It was just a question of getting households in balance with the supply of homes”, Warren Buffett told Bloomberg Television in an interview. “That happens in different paces in different parts of the country, but you have seen a much better balance developing here in recent months. And that’s why you’re seeing some pickup in prices in places.”

Berkshire’s HomeServices of America Inc. unit will be the majority owner of the Berkshire Hathaway venture to manage a US residential property affiliate network. Berkshire’s managers have been positioning the firm to benefit as the US housing market recovers from its worst slump in seven decades.

For British investors, seeking exposure to international property market, the risks inherent in dealing with foreign tenants, tax and legislation can be handled by using a pooled fund such as a unit or investment trust, where minimum investments are often a few hundred pounds.

American house prices have fallen by almost 50% in some states. Bigger house price falls on the eastern part of the world are also attracting property buyers. Tokyo property prices today are a fraction of the level they reached in 1989 when, for example, it was estimated that the land occupied by the Imperial Palace in that city was worth more than all the real estate in California combined.

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