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Hello Crazy Gang,
Some members of ShareCrazy.com will possibly recall that in recent months, I've expected a housing price crash. But I'm beginning to change my mind. (Share shifters are allowed to do that - it can save a lot of money)
I met a well-known builder over the weekend who said that business was booming. He couldn't build houses fast enough to meet the huge demand.
And the Goverment has said that three million new homes are now needed. Wow! That's some demand.
House prices have stabilised in some areas, but will there be a general crash? Well my common sense tells me that if supply can't keep up with demand, then prices will continue to rise.
That's one of the most certain rule of economics I know. And even if economics is one of the most unreliable of sciences, well, I just can't see a need for three million new houses causing a crash in prices. Though of course, the experts are mainly against me on this - and they could be right.
Now if house prices don't crash, what effect will that have on share shifters like us? Well it means that eventually more money will go into bricks and mortar investments and less into shares.
And it will mean that as more people pay more money for a place to live, they'll have less spending power for other areas - like holidays, say or high street shopping.
So if house prices continue to go up, spending power will be less and share values may drop. That's the theory, but at least building company shares and the stocks of related firms will do quite nicely.
So I may well look at some firms which depend on the building trade this week. Maybe it's a good opportunity for me. And now let's all go and take avantage of another building - the Punter's Return. Rock on!
To find out more about Malcolm CLICK HERE
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