British Investment Opportunity in Texas real estate

The US dollar and the UK pound pairing are historically acknowledged as one of the most important currency benchmarks. Since the pairing is highly volatile, it provides immense possibilities in the investment arena. However, despite the volatility, the pound-dollar exchange rate has centered around 1.9 to 2 from 2003. Currently the pound is in a very dominant position compared to the USD, (0.504719 - British Pounds to 1 USD as of April 21, 2008). Trouble in the US housing market has caused the weakening of the dollar in recent times. The rate cut by the Federal Reserve Bank to 4.75% has caused a 1 % interest rate differential in favor of the Pound at 5.75%. However, considering the fact that the exchange rate is around 2 and the possibility that the US dollar will return to the 10-year average investing in US real estate seems to be a very bright and profitable venture.

GBP vs. USD Exchange Rate

It makes sense to buy cheap and sell high. If you have your assets in pounds you can buy real estate at 30% discounts compared to the previous stronger USD. Nevertheless, this has the danger of the sudden plummeting of value of the real estate you have bought. This can be easily circumvented if you buy real estate in Texas, where the property values have remained stable through out the current credit crisis and during the earlier period of double-digit appreciation (speculation) in much of the country including California, Arizona, and Florida..

Due to the current bursting of the housing market bubble the prices in many high value areas have gone down steeply overnight. Many buyers have been driven out of the housing market by the current credit crisis. They can not longer qualify for a loan. Amidst these negative trends in real estate value, a reverse trend is to be found in Austin Texas and the surrounding Central Texas Hill Country.

While the value of real estate plummeted drastically elsewhere in the US, the land value in the Texas region held firm showing, even showing slight depreciation of a 5% average. The prices in Texas have remained steady over the years thus making it highly suitable for investing. With the steady real estate values and the weak dollar, European investors have ample opportunity to cash in on the struggling United States economy.

The Great British pound has clear 0.5 dominance over the American dollar at present. So even with little appreciation in the property value, when the American dollar regains its stand the UK investor will be sure to reap multiple rates of returns.

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Austin Texas Real Estate