News picks of the week
29th July – Building the next boom - Economist
Perhaps property is about to have another moment in the sun, thanks to its income appeal. Cash yields next to nothing and despite talk of “tapering”, central banks show no sign of raising short-term rates.
Property investors may need to be selective. But the global economy faces four potential outcomes: a return to healthy growth (in which case rents should rise); a low-growth, low-inflation period in the doldrums (in which case the income appeal of property should help); a return of rapid inflation (as a real asset, property should offer some protection); or a deflationary slump. Only in the last case would property suffer. Three-out-of-four seems like good odds.