Wednesday, July 01, 2009

Expat economics - is opportunity knocking?

It’s interesting how economics can change people’s behaviour very quickly and how those that are ‘fleet of foot’ can benefit.

For a long time the euro was very weak against the US dollar and Sterling. The halcyon days for many were when the pound Sterling was at 1.45 euros and many things in Europe, notably property, seemed very cheap.

Now that’s all changed of course. At some levels the euro and pound touched parity and as I write it’s sitting at about 1 pound to 1.16 euros. That’s been bad news for many British expats who get their income such as pensions in Sterling but are now living in Europe in the Eurozone. Suddenly prices in continental Europe don’t look so cheap and I know many are struggling to survive on their old income.

Even so, some dynamics are already swinging into action. Suddenly Brits in Europe are starting to buy more and more over the Internet from the UK as a lot of stuff ‘back home’ suddenly looks much better priced than the same items being sold in the local town. The ferries are suddenly full of vans going over to the UK to ‘stock up’ on various items - notably DIY, Electrical Goods, Clothes and, wait for it, alcohol! The clinks of mass bottles can now be heard on ferries docking at the channel ports coming FROM the UK!

How times have changed!

Perhaps one of the biggest growth areas in this respect are the new and second hand car markets. There are now a number of specialist UK based car suppliers of left-hand drive vehicles based in the UK and they are selling their vehicles in Sterling not Euros. I know someone that recently purchased a LHD car from the UK in Sterling and saved approximately 4500 euros on the same car if purchased locally.

It’s also noticeable how small businesses, predominantly Internet based, are now springing up in many Euro countries and they are all targeting locally resident British expats that want to stretch their pounds further. Many of these include delivery services to a range of specified European countries.

As they say, “It’s an ill wind that blows no man any good”.

Of course this isn’t quite so good for those British expats living outside of Europe. The idea of running a white transit van from Calais to Sydney filled up with light bulbs and DIY kits isn’t perhaps a terribly sensible one, though then again Sterling’s decline has been less marked against many other currencies that it has been against the Euro.

So, for those expats in continental Europe, it may be worth looking on the Internet for the prices of at least some of the things you need if purchased in Britain and in Sterling. You never know, you could save yourself a lot of money!

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