Real estate appeal could grow after share market shake-up

Shares have had a tough time in 2011, with reports on crises both at home and overseas making local investors more cautious with their wealth.

Today (August 19) the ASX had $40 billion shaved off within the first few minutes of trading, as the market reacted to drops in both the US and European stock exchanges - both of which recorded dips of up to five per cent.

Investment bank Morgan Stanley released a report that showed the broader economic community might be subject to further trading slowdowns.

The document detailed a link between poor asset performance and slow market growth that could be aggravated by tighter fiscal controls in the US and European governments, with recent events contributing to what the author called "eroded" confidence in businesses and the broader wealth-creation industry.

Financial manager at Fiduciary Trust Michael Mullaney told Bloomberg Financial that a "general malaise" had settled on the world economy that was deflating people's expectations on growth.

Mullaney asserted: "It’s almost like a worldwide buyers strike."

In times of market unrest, investors have historically turned to more stable forms of investments - such as property.

While housing markets have been slow in recent months, there could be a sudden peak that results from savvy wealth-creators and professionals with real estate training.