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.”
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