Are you wondering whether this is the end of the property bull market? You will hear conflicting information. There are those saying that:
1. The OECD countries are so indebted that they will take years to bail themselves out
2. You have central banks cutting interest rates around the world
What gets me is how people just don't understand global finance...including the so called experts. Everyone is an expert. I must concede that it does take a lot of time to learn global finance. It covers a lot of topics. Fortunately property is one of those areas which is a lot simpler to understand. Simple, but its not always readily evident. For instance, relationships are often over-simplified. eg. Cuts in interest rates mean rising housing prices. That is a dangerous assumption. Falling property prices mean recession or depression. So which way is the market going?
My answer to this is simple. Its going sideways. That is true for property and equities, though equities clearly offer the superior opportunity to trade positions. You should therefore look for rallies and sell into weakness. The implications for property: Look for yields in Western markets. Really Japan is the only OECD market offering good yields, and best of all is that anyone can buy property there. I bought property there on a tourist visa.
The other opportunity are those Asian markets which have not yet moved. The best two economic laggards are Indonesia and Philippines. These two countries still offer capital growth propositions. Among those two countries the Philippines is by far the best prospect for a number of reasons including visa rules, reform measures, language, etc. The Philippines like Japan also has a sizeable foreclosed property market, though the price discounts are not nearly as compelling as Japan. But thats ok its a interesting story for different people. If you want a tropical life you go to the Philippines, if you want a cosmopolitan life you go to Japan. If you are a high roller, then you have a place in each country, and spend a few nights transferring in Macau besides. :)
------------------------------------------------
Andrew Sheldon www.sheldonthinks.com
1. The OECD countries are so indebted that they will take years to bail themselves out
2. You have central banks cutting interest rates around the world
What gets me is how people just don't understand global finance...including the so called experts. Everyone is an expert. I must concede that it does take a lot of time to learn global finance. It covers a lot of topics. Fortunately property is one of those areas which is a lot simpler to understand. Simple, but its not always readily evident. For instance, relationships are often over-simplified. eg. Cuts in interest rates mean rising housing prices. That is a dangerous assumption. Falling property prices mean recession or depression. So which way is the market going?
My answer to this is simple. Its going sideways. That is true for property and equities, though equities clearly offer the superior opportunity to trade positions. You should therefore look for rallies and sell into weakness. The implications for property: Look for yields in Western markets. Really Japan is the only OECD market offering good yields, and best of all is that anyone can buy property there. I bought property there on a tourist visa.
The other opportunity are those Asian markets which have not yet moved. The best two economic laggards are Indonesia and Philippines. These two countries still offer capital growth propositions. Among those two countries the Philippines is by far the best prospect for a number of reasons including visa rules, reform measures, language, etc. The Philippines like Japan also has a sizeable foreclosed property market, though the price discounts are not nearly as compelling as Japan. But thats ok its a interesting story for different people. If you want a tropical life you go to the Philippines, if you want a cosmopolitan life you go to Japan. If you are a high roller, then you have a place in each country, and spend a few nights transferring in Macau besides. :)
------------------------------------------------
Andrew Sheldon www.sheldonthinks.com
No comments:
Post a Comment