Sunday, September 19, 2010
Government will inflate away the property bubble
The bubble may have burst, says Ross Clark, but a crash looks unlikely. For now, property remains a sensible investment â€” better than sticking cash in a low-interest account. "Why risk your capital in a savings account for puny interest which isnâ€™t even keeping up with inflation? I keep wanting to put it into something solid: gold or property. I remain convinced that we face a second correction in real property prices. Rental yields remain too low. And yet still I donâ€™t believe that investing in property is necessarily a disastrous thing to do at the moment. A fall in real property prices, yes, but a crash in actual prices? I wouldnâ€™t bet on it. The coalition will try every trick to generate inflation rather than suffer millions more being plunged into negative equity."