Why a second GFC could be good for your investment property
Posted on Wednesday, August 24 2011 at 10:25 AM
European debt, American recession and a looming second global financial crisis (GFC). Sounds familiar, doesn’t it? Well, according to Understand Property, another economic slump around the world is potentially a good thing for your investment property.
This is because another GFC could actually send investors scurrying to the relative safety of housing, which is nowhere near as volatile as other forms of investment.
Another reason that many people haven’t yet considered as to why Australia stands to benefit is because of debt in Europe.
“People have an option not available to governments to solve a crisis – they can leave,” Understand Property says.
“It’s happened before and it will happen again and if the situation deteriorates in Europe, as it probably will, we may once again throw open our nation’s doors to a new wave of European migration.
“Thousands of disgruntled Spaniards, Irish, Portuguese, Italians and Greeks will seek their fortunes here. Not only is our economy insulated from Eurozone woes by being increasingly reliant on Asian economic fortunes, the arrival of a new wave of migrants will generate economic growth and just as our history shows, the housing market will boom for investors in the areas where they choose to settle.”
The obvious choices would be capital cities, but perhaps they could also find employment in our regional areas. And the mass migration could occur sooner, rather than later.
Understand Property says the US is printing more money to inflate itself out of debt, but Europe doesn’t have the same choice, because of the Euro. So if another GFC occurs, it will hit Europe much harder.
“When the smaller countries joined the Eurozone, they traded in their Drachmas, Escudos and Pesetas for Euros. They lost the ability to print money they now need to buy their way out of trouble.
“The only option left for the debt ridden nations of the Eurozone is extreme belt tightening. It will get worse before it gets better and could result in the break-up of the entire EU system, with political turmoil, severe depression and high unemployment in the worst hit countries.”
And the mass migration could occur sooner, rather than later.
Another boom is just around the corner and this is why people shouldn't wait to long before purchasing property. The current bargain prices wont last forever.
What happened last GFC ?? Prices fell, the govt Shat itself and intervened. I know you are looking for positives but if you honestly agree with this article you are way dumber than I thought.
What happened last GFC ?? Prices fell, the govt Shat itself and intervened. I know you are looking for positives but if you honestly agree with this article you are way dumber than I thought.
Do you not think they'll do the same this time?
I don't think the extent of the stimulus will be as great this time, but there will be stimulus. Interest rates will fall shortly.
If there is a new GFC it will be beneficial for property prices, in the same way the last one was.
Another GFC is definitely not a given. The difference is now there is no govt with a clear majority. Not to mention horrible polls. Who knows the current problems could see a liberal govt soon.... Any stimulus from them would be squarely aimed at business to preserve jobs. In regards to housing stimulus... You have heard of the law of diminishing returns. I have heard plenty of experts say it would not work second time round. Moving another 100,000 couples out of rentals... That will fix everything. Not.
Another boom is just around the corner and this is why people shouldn't wait to long before purchasing property. The current bargain prices wont last forever.
Yay, a whiff of bullish speculative news amid a sea of bearish facts. Where do I sign up for the property investor happy pills?
I don't think the extent of the stimulus will be as great this time, but there will be stimulus. Interest rates will fall shortly.
If there is a new GFC it will be beneficial for property prices, in the same way the last one was.
Catweasel laugh. Zealot never short of the boom boom prediction. Its a ability to weave story out of thin air is its great contribute to asset price. Never short of the mouse to buy into story. Mouse now so deep in its manure, all it really have be a hope.
You might want to have a look at the value of the Aussie dollar at the time of the GFC and compare it to the dollar today. No one in Europe is going to be bringing wads of cash over to Oz to buy houses. When you consider the exchange rate and the growth in Aussie house prices, it just doesn't make sense. I think you need another input to your Ponzi scheme.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
You might want to have a look at the value of the Aussie dollar at the time of the GFC and compare it to the dollar today. No one in Europe is going to be bringing wads of cash over to Oz to buy houses. When you consider the exchange rate and the growth in Aussie house prices, it just doesn't make sense. I think you need another input to your Ponzi scheme.
Once more Sherlock shows his ignorance. There is a big difference between volatility and performance. Majority of investors (especially traders and speculators) and speculators like volatility more than anything
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