It has been a while now that the dust has more or less settled since the upheival that was the "end of the world" otherswise known as the GFC had occured and given we are still here and the banks have no repossesed my house I thought I might write some words about who was right the doomsayers or the property faithfull.
Please dont interpret my flippant way of writting as an attemt to discount what occured during the GFC but like all good hysteria panics they are blown out of proportion. Further more people use such events and the media's exageration of it as a vindication of their own ideological views be it for prices to go up or down.
The views I refer to is the usual idelogical battle between the two camps i.e. those in the "property prices always rises" camp and those that beleive "property price is going to crash" camp.
So who is/was right?
For instance using the GFC as the clear modern day example, prices can fall. Ask any developer who tried to get finance during this period and they will say it was pretty hard to get valuations to stack up or any distressed seller trying to sell their house and how many viewings they got. Prices fell, sale figures fell and approvals fell across the board that is fact.
But this is nothing amazing, this is business and known as risk. Like ANY asset class prices go and and dow and sideways. So this event should have been a clear enough example to those saying prices always go up are wrong.
Finally? vindication for the doomsayers camp??, who use this event as vindication that the end is near that prices are inflated and property prices will collapse 20-30 even 40%.
The problem now is, that given time has passed, a mere 6 or so months, prices did not fall that much, if anything they have recovered so what are the doomsayers now saying?
If your a property supporter who is grinning at reading the last paragraph and saying "yep sucked in to those idiots they were wrong", just mentioning the likes of Steven Keen even makes me also want to insticively think the same, then you are wrong too. Basically you are no different from the doomsayers camp because no sooner than prices start to rise we hear the familiar parrots for for the other camp screaming that the skies the limit and boom times are here to stay and that "this time its different".
So who is/was right?
The answer should be clear, neither! Instead the large number of faceless and more importantly campless business minded people who were quietly adjusting their investment strategy based on the prevailing information were right. They understood simple economic principals such as cycles start and end and therefore taking advantage of the downside by picking up undervalued assets and now re-adujsting again for the prevailing up cycle.
So what I am saying is be smarter than the masses, see property for what it really is, an asset class, that goes up and down and that money can be made whatever stage in the cycle we are in so long as your decisions are business ones and not ideoligical ones.
Good luck in 2010, happy investing (or not).
PS: I am hoping for responses other/better than "but what about the USA and UK.."
Please dont interpret my flippant way of writting as an attemt to discount what occured during the GFC but like all good hysteria panics they are blown out of proportion. Further more people use such events and the media's exageration of it as a vindication of their own ideological views be it for prices to go up or down.
The views I refer to is the usual idelogical battle between the two camps i.e. those in the "property prices always rises" camp and those that beleive "property price is going to crash" camp.
So who is/was right?
For instance using the GFC as the clear modern day example, prices can fall. Ask any developer who tried to get finance during this period and they will say it was pretty hard to get valuations to stack up or any distressed seller trying to sell their house and how many viewings they got. Prices fell, sale figures fell and approvals fell across the board that is fact.
But this is nothing amazing, this is business and known as risk. Like ANY asset class prices go and and dow and sideways. So this event should have been a clear enough example to those saying prices always go up are wrong.
Finally? vindication for the doomsayers camp??, who use this event as vindication that the end is near that prices are inflated and property prices will collapse 20-30 even 40%.
The problem now is, that given time has passed, a mere 6 or so months, prices did not fall that much, if anything they have recovered so what are the doomsayers now saying?
If your a property supporter who is grinning at reading the last paragraph and saying "yep sucked in to those idiots they were wrong", just mentioning the likes of Steven Keen even makes me also want to insticively think the same, then you are wrong too. Basically you are no different from the doomsayers camp because no sooner than prices start to rise we hear the familiar parrots for for the other camp screaming that the skies the limit and boom times are here to stay and that "this time its different".
So who is/was right?
The answer should be clear, neither! Instead the large number of faceless and more importantly campless business minded people who were quietly adjusting their investment strategy based on the prevailing information were right. They understood simple economic principals such as cycles start and end and therefore taking advantage of the downside by picking up undervalued assets and now re-adujsting again for the prevailing up cycle.
So what I am saying is be smarter than the masses, see property for what it really is, an asset class, that goes up and down and that money can be made whatever stage in the cycle we are in so long as your decisions are business ones and not ideoligical ones.
Good luck in 2010, happy investing (or not).
PS: I am hoping for responses other/better than "but what about the USA and UK.."
