Let's look at the number to show is the Economy has really ground to a halt. Will it be as bad as the Depression in '29, what about WW2 or 2008?
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Hey, guys so have coronavirus really ground the economy to a full stop. So what I wanna do is just look at the numbers. I've just gotten a whole heap of different news agencies and things like that just to look at the numbers from you know Earnest and Young to Knight Frank and all around and see what they're predicting what they're saying what the actual numbers are and that's sorts of thing. Firstly, there are no reliable data back from say the 1920s so lots of people are running around going depression worse or just as bad as the Great Depression. The numbers just don't stack up there you know they can sort of estimate and guesstimate but the numbers aren't perfect. Yes, they have numbers but you know can you really, is it apples for apples not really. Probably the GDP is the best indicator.
And the other thing is that you know when you look at this you got to look at over what duration because it's all good to say 10% drop but if that 10% drop is over one year versus say four or five or ten years you know it's a different type of experience. And I think that's we are really going to look at most people are running around and even myself I'm saying you know the pause button on the economy.
I think we're saying pause not stop because I think the important thing to understand here the economy is still going yeah. Things are still happening food, manufacturing you know you name it there's a whole range of things that are actually happening in the economy. You know Medical, Schools are you know even though they're on remote the teachers are still going to school. So there are still people getting paid. The economic wheels are still turning. So it's not a case of you know I think when we say stop or pause a lot of people think that we're back down to zero and it's like nothing is happening you know and we're totally reliable element.
No actually if you think about it in the Great Depression well that's all here bad is potentially a 10% drop in GDP. A 10% drop that means there's still 90% of GDP there during the Great Depression okay. So what we're talking about is a somewhere between 10% and 0% or growth I guess. But I think nothings have definitely dropped off.
Now look let me give you some numbers 1 million people they reckon my employed have gone for universal credits so that's 1 million people either I think 66 million is how many they've got in there in the country. So you know that is quite a substantial amount already now some of those may end up coming back on furlough but you know you're talking about hospitality you thought you know hospitality a 96% drop in hours worked 96. I mean that's basically from you know there to zero. You know you know there's been pretty much a fall to zero and discretionary spending. So people aren't spending any discretionary money they're not going out to restaurants they're not going anywhere where there's discretionary money you know so that's really ground things to a halt.
Footfalls down like 83%, 44% down new car sales and remember a lot of this information isn't actually since the lockdown which could even be worse than that. Okay, so some of these figures from last month the month before you know and more recent. But they could be over the last quarter they could be you know so a lot of these figures you've got a really way out you know the truth of them. But the fact is the economy has dropped we probably will go into a recession I think that's pretty much a foregone conclusion ish but the question is when the play button is pushed after the pause weather that you know takes us out then and therefore it's not that big a deal of a recession. And I think that's you know as long as we keep the unemployment down then that is likely to you know have an effect.
But look there's no doubt about it there is a lot going on right now and we're being shielded from it because of the government policies that have been put in place which I think are fantastic. Night Frank, I reckon half a million sales could be lost. That's a lot of people selling property. Now we already come from a low base so the good news about that coming from a low base means people have been able to hold that they weren't in a position to sell for Brexit or Brexit all the issues with Brexit were happening. The likely that is they can still hold now through this I think you know Knight Frank is talking about a 3% drop this year in house prices and a 5% increase in 2021 that could still happen.
I'm probably I'm thinking more there's gonna be more of a downside than that I think that's quite optimistic and I think that would be if everything you know if we had a fair wind behind us and everything worked well. I'm not convinced that that's gonna be the case. But you know as you can see you know some industries have been hit totally I mean if you're on a cruise ship right now Wow I was watching our listen reading some articles today that cruise ship and they're predicting that it's gonna be 2023 before they're back up to 20% of the capacity they're at in 2019 you know that's massive. That's a long time you know I have to be there so you know if you want to get on a cruise ship I reckon there'll be some really really cheap super cheap ships going around all cabins.
Let's talk about this one particular thing which is you know is it as bad as the depression is it as bad at World War II is it gonna be that sort of thing so look 2020 honestly on the saying that the GDP drop will be around a bit so they're saying 6.0 so say 7% yeah a drop of 7% and this is where a lot of this depression word comes from. Which is basically in a 1919 1919 there was an 8% drop and in 21 there was a 10% drop so you know so that's significant drops that's still at this stage from what most people looking that's still worse than what we're seeing here. And I would agree with that okay I agree with that I think if the government especially in the UK if the government plays its cards right it stimulates in the right manner which it has done so far by getting individuals and businesses you know and getting the money to them and not looking necessarily after all the wealthy and big corporates and that. I mean look at the US and do the opposite is sort of the advice I well the thing that I'd be doing now because let's face it they're a bloodbath right now. We're probably worse than world war two because world war two 5% drop yeah so we're probably ending up you know somewhere between the Depression and World War II you know if you look at 2008 the global financial crisis GDP was about a 5% contraction okay so you know it was actually 2.1 % drop in a single quarter at that stage which is probably we will probably have a bigger one than that and we'll probably have a big contraction than that. So it's likely to be worse than it wasn't in 2028 but remember in 2028 in 2008 right.
In 2008 what they did was they stimulated and they played trickle-down economics which is they invest money in the big corporations and they expect that to trickle down, doesn't work yeah fails dismally, makes corporations rich, makes you know shareholders and directors rich and that's about all it does. Artificially Rises of the price. It doesn't actually help the average person by doing what they've done this time, not the US but the UK, Australia, Canada another other you know a whole heap of other countries they've given money directly to those individuals. That actually now sure right now nobody's spending it. But that keeps them in jobs yeah that allows them to have money so that when we come out of this and when the play button is pressed we're back into it. Hopefully, you know pretty quickly and we will see how that works. You know if you like two phases phase one is the virus phase and phase two as a post virus phase.
I think they've done a pretty bloody good job of the virus phase the post virus phase we'll see how they play but I hope if they keep the same attitude and they keep the same approach I think we're likely to pull through this better than what we may have done. Let's face it there's been a massive bubble building and if that bubble goes pop then potentially we're going to have deflation or deflation and pressure across the all the economies.
Bottom line is a lot of people are still working you know they're just working from home. And yes they're not as productive as they were. You know my team are not as productive as they were and part of that is not because of my team it's because they're having to deal with not only the job at hand but the emotion that goes along with the job. Especially the property management you know that's a hard one because those guys my guys they are getting bombarded with emotional tenants or saying I'm not gonna pay my rent I can't pay my rent. And they range from the full spectrum and that's just not my business that's I'm sure that's every business out there you know people who can't pay their bills and want time to pay. People who don't want to pay their bills because it just said screw it, I don't care this is what I'm doing.
Bottom line is we'll never stop never mean stop yeah. The economy is still moving but you know if you think about it 10% drop you know the Great Depression 5% was World War II and we're going to end up say about a 7% so that's a fairly big ask you know that's a fairly big it's a serious thing out there. But you know certainly pause doesn't mean dead stop we are not at a dead stop, yeah the economy is still moving which means and it misses I think the real thing that I want to get across in this video is there is still opportunities out there
There are still reasons why you need to be sitting there and working out how to pivot your business your life and how to make a take advantage of the opportunities there. They're gonna be there you know already I'm speaking to developers about you know how we can get their property sold. A lot of them are saying well no we're just going to wait and see what happens. But I'm getting in there now because when they think and they go you know what it would be good and nice to get rid of twenty properties they're gonna come to me first.
You know and it may be that I'm pivoting and I'm pivoting to the education side of the business which I've been meaning to do for a long time just give me a bit of a kick up the bum now you know so we're about to launch that. I mean these things this is what you do in a crisis is you go and look for opportunities. But I think this the big challenge and the thing you've got to really be thinking of is you don't pivot to something you don't know. There are so many opportunities out there you have to pick the ones that you can make work. Otherwise, if you spread yourself too thin if you do something because it seems good or somebody else says it's good and it's not necessarily what you should be doing or if it's outside your core business well you might want to think about that.
But it was so hopeful that gives you a bit of an insight into my thinking around you know is stop really stop or is pause you know and has the economy really ground to a halt? it certainly hasn't.
But some guys stay safe, stay healthy and remember to stay inside for the time being but while you're sitting there you know in the shower or whatever having a coffee. Think about what's the opportunities out there you can take advantage of because there is going to be lots of them. And there's already some there I mean I've been chatting today and you know and the amazing the opportunities that are already starting appear in property. You know they're there you just have to be open to them you just have to have the right frame of mind get out there and get them alright guys have a great day and see you bye