Share Market Chaos Sparks Property Boom?

The local papers in Australia are running supplements explaining to the locals what is happening to the sharemarket – you see its done something that a generation either hasn’t experienced or has forgotten about: its gone down and by a lot. The fall out from Lehrmann Brothers was the last straw and the local market dived like it hasn’t for years. I suspect some of those who have had their retirement savings in the share market feel a bit like this guy:

Housing Industry Associate WA State director John Dastlik thinks the share market blood bath may start a reivival in the property market:

People are starting to come out fo the trenches and consider options to invest in property, in particular rental accommodation.

After all for many parts of Australia the economy is still strong: the demand for its mineral wealth is still driven by China, and China will come out of the credit crises well. Chinese banks actually have low levels of debt, just like the Chinese households.  Low debt is an excellent position to be in just about now on the global economy scale. So Australia’s actual economy is going to be doing a lot better than most western economies for the next few years. And that will drive migration particularly to Western Australia, Queensland, Northern Territory and South Australia. WA currently has to house an extra 1000 immigrants a WEEK.

Some Australian Investors Might Feel Like This!

The only possible storm cloud for housing is a possible tightening of lending by the major banks inthe response to the crises, which may hurt the business and slow the economy with a know-on effect on jobs and property prices. The effect of any tightening would probably be off-set by shell-shocked share market investors looking for a safer option in property.

But certainly the old Chinese curse definitely applies: May You Live in Interesting Times. Gold anyone?