Bricks and mortar will hold their value

It’s okay. Don’t panic.  As the turmoil on sharemarkets around the world continues those with real estate investments should remember bricks and mortar will hold their value.

Of course buyers are sensitive to rises and falls in interest rates and the sharemarket. I’ve said in recent weeks we are increasingly seeing consumer sentiment affected by international financial events like the talk of defaults in Europe.

However the sharemarket volatility this week is actually a timely reminder that in times of trouble investors often see real estate as a ‘safe haven’.  Property is simply not as susceptible to volatile price movements as the markets.

So I anticipate the outcome for property may be twofold.  If the turmoil continues I think we may see an increasing number of high end properties come onto the market as people active in the sharemarket look to consolidate their finances. 

At the same time I do expect an increase in the number of buyers looking for opportunities to invest in property showing good rental returns and the potential for healthy capital growth. 

The question for prices will be determined by which of these two factors will be greater but either way I do believe there will be more positive activity in the property market in the wake of events this week.