House Prices in Europe
Madness in euroland. How does it affect house prices in Europe, and where do we go from here?
In this long running saga we have all the makings of a fantasy movie series more fantastical than Harry Potter, and probably with more episodes and retakes. I’m sure Stan Laurel could have turned it into an hilarious movie.
First, may I remind you that Iceland told the banks to go to hell when their system collapsed. Iceland is now recovering quite nicely, and they didn’t suffer a meltdown.
Secondly, may I tactfully suggest that as usual politicians have everything upside-down, and that capitalism is supposed to fund socialism, not the other way round.
You cant have socialism without money to fund it. The money comes from capitalism. My view is that Nature has had a pretty good run over four thousand million years. It has functioned on the basis of the survival of the fittest. That’s how capitalism works. Socialism has been tried by man for a hundred years and we cant point to a single success. Maybe we’ll get the hang of it, but somehow I doubt it. What has worked briefly (for about fifty years) is a kind of socialism which has been funded from the taxation of capitalism. If capitalism fails then socialism comes down with it as the money runs out.
The past three years have seen a curious experiment, started by the USA, and followed by the EU whereby governments have attempted to prop up the capitalist system using socialist principles. Capitalism depends on the survival of the fittest. For the past three years governments have been at pains to support the weak with massive injections of funding. This means money has gone to support those who should go to the wall, and therefore has not been available to those who should replace those weaker companies. There can be no recovery until funding gets to the start-ups which will gradually grow and provide for our future.
The current experiment stands zero chance of success. It is in fact failing before our very eyes. It stands to bring the whole fabric of our society down with it. Hopefully, circumstances, and common sense, will prevail before too much more damage is done. The first hopeful sign is that the Greek government is saying, let the people who have to pay for all this, vote on it. Let’s hope they do. And let’s hope they vote for common sense, and let the banks who have made serious mistakes pay for those mistakes. If it screws the European economies for the next eighteen months, tough shit. That’s better than screwing them for the next decade with bailouts made with invented money, and the consequent inflation that goes with that, and the decimation of savings and pensions.
So, we are about to see a decade of chaos, or a change of tack. But this is a property website, and a property blog. What does all this mean for people considering buying homes in euroland? And what does it mean for house prices?
If your usual currency is already the euro, then buying in euro territory makes no difference. If your usual currency is sterling I would hang on to it. The euro is about to enter a period of serious turmoil, and will probably lose substantial value. The only reason it is still where it is, is precisely because it is an international currency, not just in Europe, but throughout the world. It is also still a strong currency because the US dollar is inherently weak, so is sterling, while the yen appears to have a rationality all its own.
Interesting times are coming. I’d rather get a good seat and watch. When things get about as dark as they can get I shall start looking for bargains. Who knows, maybe in a year or two it will be time to start looking at cheap properties on the Greek islands. Already Italy is beginning to look interesting, and it can only get better.
On the other hand, what about the poor souls trying to sell, especially in Spain? I still think that selling an apartment in tourist land is a waste of time. Forget it. If I had a villa, and lived away from the tourist brouhaha I think I would take a realistic view and stay put. I would as an alternative angle my sales literature towards euro-using countries in the north.
Your best selling point is that you live in a place where the winters are kind, and daylight runs from eight in the morning till six in the evening, and if there is a frost, then it will be gone by the time you’ve finished breakfast, taken with a glass of freshly pressed orange juice. In Finland it’s dark until ten, and starts getting dark again just after lunch, and the snow levels make parking your car a geo-positioning art. I know, I’ve lived in Stockholm, and I remember taking coordinates to make sure I knew which hump in the snow represented my parked vehicle. Parking in mid winter by the lake at Arcos brings a satisfied smile to the complexion by comparison.
I am considering how I can best angle the Unique site to catch potential Snow Birds from Northern Europe. I am convinced they will be your salvation. In the meantime, Hang On!