Having just returned from 6 weeks holiday in Europe, mainly in Italy, I'm holding a very relaxed view that life is not that bad at all. We had oodles of fun and checked out the way people are doing business there and if it is very different from here. I spoke with hotel managers, real estate agents, tour operators and anybody who had anything to do with real estate or tourism. Fortunately I speak Italian and they were more than willing to tell me of their experience and reading the Italian papers was also very enlightening.
As we all know, Europe has gone through tough economic times as has Australia. Their real estate market has dropped considerably, but they also have the added burden of high unemployment (over 8%) and they tell me also substantial under-employment there. There are many stories of the local barista having a degree in engineering, or the waiter holding an MBA. It is very tough for people in their 30's who still live at home and I wonder if it is because their Mama’s are fabulous cooks or whether it is because they can’t afford to move out. What I learnt though is that good businesses are good businesses. They adapt, their owners or managers have a careful eye on things and their businesses are growing. It’s a good reminder.
The real estate story isn't just one story but many (just like Australia). But overall it seems there was about a 7% fall in prices in 2009, 2.5% in 2010 and volume has increased in 2011 by 3 or 4% so far. In other words, prices have dropped and buyers are coming back in to the market again thinking either ‘now I can afford it’ or ‘it’s the right time to invest’.
We’re just about to announce 3 very big sales we’ve made here in Noosa. We’re just waiting for the ink to dry first….. But it seems there’s a similar theme – when the prices are down, there are more people in the market. Perhaps it is simply Economics 101, but watching it in other countries and relating here is real and relevant. It is also, in my mind, confirmation that these buyers who buy the very big dollar properties aren’t fools – they didn’t make their money by being dumb, they are astute and understand, like the Italians that it’s a good time to buy.
So – lots of lessons and lots of fun. Oh yes, and lots of spaghetti.