Property investor, author and consultant Olly Newland explains in this Double Shot Interview why he thinks investors will turn to property at a time when stock markets are so volatile and many investors are looking for 'hard' assets that are immune from inflation, including possible 'hyper-inflation'.
"The share market is a den of thieves and is not for the small investor at all," Newland said.
"They're tired of having their share portfolios messed around with and they'd like to get into something hard that they can see in the morning and is still there and has the same value from one day to the next," he said.
I asked Olly if property as an asset class could fall just as well as rise, as it had done in America, Britain and Ireland.
"It does, but it's much slower and its very localised. In the sharemarket if some gnome in Zurich pushes a button and sells a million shares, all the shares across that company are effected. It doesn't mattar here if someone sells a house in Hari Hari for half price, it doesn't mean that all the houses in New Zealand drop in value," he said.
Olly acknowledged that no asset prices were safe if the global economy was hit very hard.
"But this is why people are moving into alternative, hard assets because the main problem is the governments of the world are printing more and more money," he said, pointing to the sharp rise in the gold price recently.
"The elephant in the room is that we might have hyper-inflation coming," he said.
I asked Olly about the prospects given countries such as Japan had been printing money for decades, but had actually seen deflation and very low interest rates.
"We've got every option on the table at the moment. Hyper-inflation is one of the options that could have. You're right that the Japanese market has been flat or deflating over the last 20 years," he said.
"You have to realise that the Japanese mentality is a little bit different from the rest of the world. Hyper-inflation is one of the risks we're taking. You see the the beginnings of hyper-inflation in the gold price and art markets," he said.
"People are definitely shifting out of volatile share markets where they have no control into areas where they have some control, and property is one of them and the hard assets I mentioned earlier."
I asked Olly about diversification of investment and how liquid property investments.
He agreed that some property may be illiquid, but investors still looked for stability.
Olly Newland is a property investor, author and consultant and has his own website.