Positive effects of the property downturn show up again

Once again, events have taken place that illustrates the point that even a market downturn can be a good thing under the right circumstances.

As the German property market completed its shift to becoming a buyer's market this week, many people were left to reflect on property downturns and whether those downturns could be good for an investor's bottom line.

As recent events have shown, the answer to that question is a qualified, but nevertheless resounding, yes.

With markets in some developing countries continuing to slow down rapidly and markets in other countries in a nose dive, it seems rather like a juxtaposition of the incongruous to say that the people that are making the right decisions are the people that are buying. Nevertheless, that is what appears to be the case, provided that the people doing the buying are buying the right things at the right time.

It is an art that is difficult to learn and impossible to master, but the good side of property downturn is being able to pick up extremely valuable pieces of property at bargain basement prices.

When a system such as the modern housing market is built on the continual expansion of credit and therefore the continual expansion of debt, market downturns are inevitable. The sub-prime housing crisis in the United States was a trigger for the housing downturn, but at the same time it was a downturn that was a long time in coming. The same goes for the downturn in the housing market in the United Kingdom.

With a global credit crunch having resulted from the housing market downturn, the companies that are really making money and playing the market right for the future are the companies that have stockpiled liquid assets in order to buy property at this very moment. These companies and individual investors are definitely experiencing the good side of the property downturn, expanding their assets in a cheap way.

The good investors are not running away from the property downturn, but rather are welcoming it as an opportunity for long term profitability.