Global warming is a subject that attracts a great deal of differing opinions, attitudes and factual information which can be very confusing and in some cases misleading. However, there is no doubt that the continued rise in the Earth’s temperature is impacting on many areas of the world and unless these problems are addressed sooner rather than later the impact on the property market in particular could be enormous.
Aside from the fact that the ice caps in the far northern and southern regions of the world are literally melting at an alarming pace, it is more the increase in general temperatures in some areas of the world which until now had maybe been off the property investor radar. So will global warming have a serious effect on the worldwide property market and what elements of these potential changes should be considered?
Whether we like it or not tourism is a major part of the worldwide property market and the hotter the area in question the greater the chance of increased popularity. As new tourism markets are developed, the need for properties, both for living and business use, can increase substantially and suddenly we have the potential creation of a property “hotspot”.
Tourism is one of the largest industries in the world and while it is heavily dependent on the state of the worldwide economy, which is currently suffering a serious downturn, this will not go on forever. When people have free money to spend many are keen to look at new areas and new countries, and we should see more and more open up over the years to come.
One of the largest elements of the investor occupied worldwide property market is those looking to retire overseas. Very often an increase in temperature, reduced rainfall and a generally better climate can make a substantial difference to the number of expats looking to move overseas. Spain is the obvious example of a more traditional hot weather property market which could be used as a template for new and exciting markets in the future.
The so-called “grey pound” has often been ridiculed by many in the press but those who understand the power and the potential of this relatively untapped area of wealth can make serious investment returns in due course. Understanding your market, what makes them tick and what affects their wealth status can pay enormous dividends in the property market.
Transportation, especially air travel, is an area which often attracts great controversy from environmentalists and “green” governments looking to introduce taxes to reduce emissions into the environment. However, a transport network is also a vital element of any property market and while on the surface and in media headlines the airline industry may appear under pressure the recent elimination of the airline industry from the UK government’s emissions strategy for the future speaks volumes.
No matter what governments around the world would have you believe, the airline industry is a vital element of the worldwide economy and they would never put it at undue risk.
When you consider that many areas of the Western world, and more and more Middle Eastern and Far Eastern countries, are fairly expensive for businesses to set up and operate on a long-term basis, new markets could prove a very strong magnet. Property prices, taxes, local economies and other similar considerations are coming more and more to the fore as well as the fact that the online revolution can, and has, substantially reduced costs in many business sectors.
As new markets open up because of global warming there is every chance that businesses and whole industries could be attracted to these potentially low cost areas of the world which in itself would encourage the development of a new property market, growing economy and attractions for more and more investors and visitors.
High risk investors
While a new investment market, or a new type of investment, is likely to offer a higher than normal degree of risk to investors there would appear to be no shortage of potential high-risk investors in the international property market. In the past we have seen markets created out of literally nothing and a snowball effect come into play which can change the whole environment and potential for a region. These high risk investors, some of whom can make significant money by early entry into a new market, tend to be leaders rather than followers and in many cases will have left markets before the more traditional property investors arrive.
The ever expanding EU
In the EU, and the constant growth in membership numbers, is having a significant impact upon many smaller countries which until recently were fairly inaccessible for traditional property investors. One vital element which is often missed with regards to new EU entrants is the fact that they are forced to transfer EU style regulations and legal frameworks with regards to a variety of areas of everyday life, including the property market. This can offer investors a certain degree of comfort as and when these regulations and laws are in place.
Is it morally correct to make money from global warming?
This is fairly similar argument to the moral issue regarding investing in war-torn countries and “taking advantage” of panic, confusion and rock bottom property prices. However, it must be realised that without the inflow of funds from property investors many of these countries which were formerly war-torn and many of these countries which have been impacted upon by global warming would never be able to develop and take a competitive stance on the worldwide stage.
While nobody ultimately wants to make money off what can be and looks like being a very difficult long-running situation, i.e. global warming, without inward investment into affected areas of the world significant economic growth would be nearly impossible. We are only just starting to see mention of the potential impact which global warming could have on the worldwide property market and though many elements are guesswork, there is no doubt that weather patterns are changing and sea erosion in some areas of the world has increased significantly.
It must also be remembered, even though some would disagree, that the earth has been through such periods of temperature increase in the thousands of years prior to today and there is evidence of self rectification. Whether global warming has gone too far to be reversed is another matter open to debate and one which will no doubt carry on for some time.