Let the US market level before investing, warns Assetz

Assetz has revealed that the American market has probably not yet completed its downward curve, meaning British investors hoping to benefit from price falls in the USA over recent months should hold off for the time being.

The continuing slide of the U.S dollar means better buying opportunities will arise over the next year in the States. New-build prices were down 10% year-on-year last month and the dollar, currently at $1.94 to the pound, could drop to well over $2.00 to the pound over the next 12 months.

Those who already own property could lose at least another 5-10% in value through currency changes alone in the near future, regardless of further house price losses.

There is a real risk to the American economy as countries like China and Japan begin to diversify their foreign exchange reserves away from the dollar, which could be devastating for the US economy as the large current account deficit is part financed by this historic demand for their currency.

Stuart Law, managing director of Assetz, says: “The message to those hoping to invest in the States is hold off, there is further to go before the market stabilises and offers the prime opportunity to investors. It is not yet clear how severe the downturn in the economy and the currency will be, so investors should avoid being tempted by current high profile advertising and marketing on US property.

“My advice to those who already own property in the US would be to avoid panic selling and instead take a long term view, placing a strong focus on maximising letting potential. The rental market could benefit from any house price collapse and if the value of the dollar continues to tumble as expected, international tourism will soar, providing great stability and demand for rentals.”