Bargains Abroad During the Global Economic Crisis
The current economic crisis has brought enormous disruption to countries across the world. But even amid the chaos, there are bargains to be had, if you know where to look.
Should You Buy Property in the Economic Crisis?
Before delving into the details of where might be a good place to look for bargains, it’s appropriate to utter a few words of caution about why now might not be the best time to go purchasing abroad.How deep and severe the crisis will be is not known. Many economists are now saying it will be the worst recession since the Great Depression of the 1930s.
Economic science – or the dismal science, as someone once called it – is much more highly developed than it was then. Whether this will lead to a speedier resolution of the crisis is not clear. If it does not, and if this really is a second Great Depression, it could be with us for a long time, perhaps a decade or more. Japan experienced a similar economic crisis in the 1990s and took around 15 years to return to some semblance of normality, despite frantic government efforts to stimulate growth. In other words, however tempting a bargain a property abroad might seem today, it could be even cheaper a year from now, or three years from now, if the crisis has still not abated by then.
Countries Worst Affected By the Economic Crisis
After implementing the policy suggestions of radical free-market economist, Milton Friedman, in the 1990s, the Icelandic economy experienced spectacular growth, followed later by an equally spectacular implosion. Its banks incurred liabilities they could not meet and had to be nationalised. But their debts were so great that the state could not cope with them either. It, too, is now essentially bankrupt, and has been bailed out by the IMF and other European countries. The Icelandic currency has collapsed against all others; so if you’ve ever wanted a place in the North Atlantic snow, there’s never been a better time to buy.Quite a few countries in Eastern Europe have been affected quite dramatically by the crisis. Still recovering from the communist years, their institutions lack the resilience of those in West European countries. Estonia, the Ukraine and Bulgaria have all taken a pounding and been forced to seek solace from the IMF. Bargain property is to be found there.
Note that not everywhere in Eastern Europe has been affected as badly. So far the central Eastern European countries like Poland, the Czech Republic and Slovakia have held up fairly well.
Property Bargains in Spain
Spain’s experience of the economic crisis has not been especially harsh compared to other European countries. But there is one particular segment of Spain’s resident population which has suffered very badly : British expats. Many of these, such as pensioners, are dependent on incomes denominated in sterling, and sterling has taken a hammering against the Euro on the foreign exchanges. This has meant a dramatic loss of purchasing power for some Brits who thought they had escaped to the sun, with the result that many are now heading home. If you have cash available (preferably in euros), there are plenty of bargains to be had along the Spanish coasts in areas frequented by your fellow Britons.Property Bargains in the USA
The crisis in America’s mortgage market is what triggered the global economic unravelling. Property prices are well down from their previous levels. If you have faith that the good old USA will bounce back, now’s a good time to pick up a bargain.Property Bargains in Dubai
In the last decade, Dubai has played host to one of the most spectacular building programmes the world has ever seen. From what was largely a barren desert, some of the modern architecture’s most extraordinary monuments have arisen. The highlight has to be the remarkable artificial islands which now lie off the Dubai coast, including what is currently the world’s largest, the Palm Jumeirah, much of whose area is given over to residential property.A multitude of celebs has been buying into the Dubai property scene in recent years. Now prices are plummeting. If you fancy the idea of rubbing shoulders with footballers, and are confident Dubai will eventually recover its vibrancy, now’s a great time to buy. Be warned, though: as some expat westerners have discovered to their cost during the current downturn, Dubai’s laws are rather harsher than those in Europe. If you end up with a mortgage you’re unable to service, you could end up in debtor’s prison!
