If Pigs Could Fly...Avian Swine Flu

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24 July 2009

We are living in extreme times. Not only are we experiencing the greatest economic downturn for a generation but now there is the life threatening peril of the swine flu pandemic and if all that wasn't enough to contend with here in Edinburgh we also have the public health hazard created by a lack of refuse collection which is giving our beloved tourists an authentic Auld Reekie experience...as with the weather at the moment; it doesn't rain, it pours.

As swine flu reaches pandemic status, every cough and sneeze is now met with suspicion and paranoia; having had a common cold earlier this week I have spent much time avoiding the old and pregnant and reassuring everyone else that I did not need quarantined. Whilst people's fears are understandable it illustrates how the wider social or economic context can change the way in which we deal with the mundane and ordinary.

The role of hysteria and panic can be seen in any number of events throughout history, although often only with hindsight and there in lies the challenge/opportunity. From a modern perspective the witch hunts of the middle ages may seem irrational but they shared many common themes of fear and paranoia with more recent investment bubbles; be it the Tulip Mania of the 17th century, the South Sea Bubble of the 18th century or the Panic of 1873 which marked the beginning of the Long Depression. The last event being triggered by a banking collapse, followed by the crash of the Vienna Stock Market all at the same time as the Equine Flu (H7N7).

So as GlaxoSmithKline eyes up a £3bn windfall from swine flu we should be reminded that all these events have allowed the potential for profiteering both on the rise and fall of the market; for example and whilst on the topic of bubbles; is now the time to buy Michael Jackson memorabilia or rather should you be selling your rather aged copy of Thriller?

All these events rely on perception and confidence and provide opportunities for those involved if they can distinguish the reality from the hysteria and with this in mind we turn our attention to the Nationwide/Consumer Confidence survey; slightly more scientific than a ducking stool.

This month the index has shown a continued improvement in public expectations as well as overall consumer confidence and the graph below shows a clear upturn in the Expectation Index over the past few months.

The Spending Index below has also shown a steady consistency in buyers perception of 'now' being a good time to buy major items, such as houses or cars; clearly buyers are recognising the value achievable in the current market.

The confidence of buyers is essential to market operation and these indices show a positivity and potential for the future that bodes well for a continued market stabilisation as we move through the summer months into the traditionally more competitive Autumn season.

RICS Survey

The RICS survey in Scotland also reflects this positive outlook as the sales and price expectations of surveyors are notably more positive than this time last year.

As agents we experienced the appetite that built the housing market bubble and we have shared in the the fear and despair of many individuals and investors over the past 18 months as the market has retreated. What we are now seeing amongst our clients is a more consolidated and level headed approach to property, one neither driven by frenzy nor one of desperation and survival.

The positive indicators in confidence, both from within the industry and the wider public, combined with a higher degree of rationality in the buying decision should hopefully suggest a more stable trading period in the coming months.

While some uncertainty lingers there is still opportunity but maybe Kipling said it best; "If you can keep your head when all about you are losing theirs and blaming it on you,If you can trust yourself when all men doubt you...Yours is the Earth and everything that's in it."

Contact Us

If you have any questions, would like any further information regarding the above content or would like to discuss how the Rettie & Co. Consultancy & Research Team can help your business, please do not hesitate to contact:

Andrew Meehan
Researcher

t: 0131 624 9051
e: andrew@rettie.co.uk

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