How Property investors take advantage of falling currencies to protect their wealth

money cat with shopping trolley

Currency Advantages for Property Investors Falling ¥, $ and ฿ seeks safe haven in UK residential markets

Since ‘Black Monday’ (24 August), the turmoil caused by China’s free falling stock market has had a knock-on effect on the world’s currency markets; largely due to quantitative easing measures across the US, Europe and Australasia.

When China devalued the Renminbi on 11 August the emerging markets reliant on the Chinese economy suffered the worst. Consequently, neighbouring nations felt the pain with Indonesia’s currency hitting a 17-year low along with the Taiwan Dollar and Thai Baht falling to their lowest levels since 2009.

The Australian Dollar fell below US$0.70, the lowest in six years, prompting concerns the country will face its first recession in a quarter of a century. Australia’s historically low interest rates, designed to encourage domestic spending, have fueled a housing boom.

What this illustrates to me is that locally economies are on the extinction list. We are all living in a global economy and when a large nation catches a cold, the contagion spreads like chickenpox in a kindergarten.

So how can Property Investors benefit?

For individuals seeking to protect and preserve the value of their wealth, bricks and mortar is seen as a safe haven especially within markets that boast healthy economies and stable political landscapes.  On a global scale, this often means looking outside domestic housing markets.

I have been tracking the house price indices measured by financial providers such as Halifax and Nationwide, as well as the Government’s Office for National Statistics data. Since the beginning of the year, British property values have risen by 5.7 %. What this indicates is that the UK has one of the world’s strongest and safest housing markets.

 London, itself, leads the British property market with average sales prices recorded at £488,782 (as at July 2015), up 5.67% year-on-year compared to England and Wales  average value of £183,861, a 3.74% increase during the same period.

With international market turmoil continuing, my money is on a surge of London property sales.

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