22 Mar 2018
Global Financial Crisis: Megacities
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The 2008 GFC (Global Financial Crisis) was a financial catastrophe however the subsequent flood of cheap money from central banks around the World has had a profound impact on all assets prices including fixed interest, stocks and property.
If you look at megacities around the World, residential property prices in London for example have increased from 3 times median earnings to 10 times, Sydney to 12 times and Hong Kong to 19.4 times.
This price increase makes it extremely difficult if not unaffordable for locals to buy property in their own city.
We do not know the timing but asset prices will and do eventually mean revert back to their long term averages which gives investors the opportunity to buy quality assets at discounted prices.
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