Ten years ago in 2002 the West was still reeling from the aftermath of the September 11th attacks on the USA and their government had responded by lowering bank interest rates which led to a flood of liquidity into the global financial system. This then led to a frantic search for yield by investors as net income returns plummeted while asset values including property soared.
At that time, here in the UK we were seeing increasing evidence that Joe Public had recognised that buy to let property was an alternative route to wealth creation and many jumped on board the bandwagon, which rapidly gained momentum over the following six years.
One oft quoted statistic regularly trotted out was that UK property doubles in value every ten years, reflecting housing market data going back over fifty or so years to the post-war baby boom era. And until recently this fact of the likelihood of regular price growth was rarely challenged. Indeed, many people who bought off-plan apartments and houses based their strategy on the assumption that prices would inexorably rise over a five to ten year period.
Fast forward to the harsher market reality of Spring 2012, when in a room full of property investors and landlords I recently observed that not one person - when asked by the events host - thought that average property values would rise in the next three or so years! That is quite a turnaround in sentiment.