August 7th 2010
All Quiet in the Euro-Zone
I try not to be too depressing in these market notes, but there is not
a lot to smile about in the world of real estate.
The market in the UK will stagnate or fall a little as the year goes
on. The market in the USA is still falling, and set to fall further
still. The stimulus packages have done nothing to revitalise the
country, but have instead plunged the state finances into a spiral of
unredeemable debt. Western Europe is still reeling from fears about its
currency's very continuance, and Eastern Europe is teetering on the
verge of financial chaos.
I still believe only the brave or foolish are investing anywhere in
Europe at the moment. I fully believe the euro will go lower. It is a
currency on a small bounce at the moment. I dont see how that can last.
This was mainly caused by short covering in the money markets. That
activity is now over, and I cant see any buying pressure coming in the
next few months. The only news has to be bad, or at the very least,
disquieting.
South-east Asia is relatively quiet, but is probably ready to move up
again. Brazil is luxuriating in boom time. It is perhaps the only
country in the world where you can make money by investing in off-plan
deals. My only proviso is: dont invest in deals where planning consent
has not yet been given. The planning process in Brazil is lengthy and
not necessarily a foregone conclusion.
I was hoping to be moving forward with my new scheme for cheap housing,
but there are still irritating hurdles to be cleared, and I dont expect
to have any useful news for at least another month. The trouble is, my
base is Portugal, and most of Portugal shuts down for about five weeks
from the end of July.
John
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