I post this topic because I believe most investors are not aware of peak oil, or if they are, are not aware of how soon it will begin to affect us.
Property values tend to rise when the economy is strong and population continues to grow. If Australias economy goes into recession property values fall, as it has always been, but recession never lasts forever and property values tend to rise again when the economy picks up. Investors, financiers and most economists continue to say that property will always appreciate because our economy remains strong (for the most part) and our population continues to grow, but what if we encountered a recession (or depression) that lasted a very long time, even forever? I refer to the fundamental flaw in our world economy – it is based on oil! Our entire economic system today would collapse if we lost the use of oil, and it is running out. If we past peak oil in 2006 the cost of oil, and in turn the cost of living will continue to rise indefinitely. I believe we are seeing the last few years of a strong investor freindly economy in Australia and other western nations because of our addiction to oil. – and they say property is a LONG TERM investment.
I don't believe the peak oil theory will have much affect, There is plenty of oil left, As new technogy arises they are getting more and more oil from existing wells that were thought would be un economical by the mid 90's, finding ways to drill wells in deeper waters and in areas thought imposible years ago, and are begining to drill heavy oils that in the past were thought to be un recoverable,as the technolgy become available there will be more use of oil shale rock and oil sands as a sourse of oil, yes oil may run out one day but not in the next 30yrs, the price may increase but as it increases investment goes to new wells that were previously un economical and new production will come online and the price will steady,
Plus there are many new technologies that will slowly take the load off oil, for example better fuel efficiant cars eg, hybrids, plug in hybrids and fuel cells, different fuels such as Bio fuels, biogas, hydrogen and solid fuel gasification.
I don't think there will be a silver bullet to replace oil, but i think the future energy needs will be sourced from a mixture of technologies that are slowly becoming available.
It is a good point that you make.
I have read many things on oil both negative and positive.
My view that your relation to oil and the property investment sector has a valid point however, if we ran out of oil in the future,
property investing will be the least of our problems…
I read something a while ago about the depression that Germany and many European countrys experienced after the world war.
It said that after the currency basically was wiped and everyone started from scratch, within two years the poor people
were still poor, and the rich became rich again.
Wealth creation I believe is a mindset and not dictated to the situations surrounding you… If you have the nack for property, you
will see things before it comes, and act before it happens.
However, like the previous comment, I think there is enough oil around, and if not then humans will just adapt…..
The Pyramids, Babylon, Rome were all built without oil for transport… or mobile phones….!! good pieces of realestate…
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