life
PROPERTY
Green Shoots grass or weeds
Sam Biles is Managing Director of leading Country House and Waterside Property Specialists
Creasey Biles and King 01983 282222 [email protected]
A recent story in The Times
that the price of a detached
family home rose by 4.9 per
cent between December 2008
and January 2009 - pushing up
average prices by 0.2 per cent
- came as a surprise to many.
These figures, that came from
the Department for Communities
and Local Government, hardly
reflect the market on the Isle
of Wight - or does it?. Indeed,
most Estate Agents around
the country have probably
been scratching their heads
wondering just where this place
is that is defying the national
and even global trend.
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No national statistic on the
property market holds up on a
local basis - unless the locality
represents the national average.
The Isle of Wight does not
though perhaps it is not that
far off. I am beginning to think
that many of these national
figures are simply PR exercises in
headline grabbing. The truth is
that we are in uncharted waters.
There are fewer properties
coming on the market for sale
which suggests a sellers’ market.
Compared to two years ago
there are also fewer buyers with
finance in place, which suggests
a buyers’ market. Everything at
the moment contradicts itself.
In my view the person who
announces what the months
ahead are going to bring will
only be correct through luck and
not judgment.
So let’s look at the 'Now'. This
is what we know. We know
, or think that we know, that
at some point in the medium
future this market will turn.
More mortgage funds will come
into the market - hopefully
from Bankers' pension pots?
(apologies to Sir Fred!) albeit
with more limits that we were
once used to. The sun will
begin to shine; confidence
will return and with it people’s
desire to move for discretionary
reasons ( rather than the
reasons that have kept the
limited property market of the
last year going - job moves,
finance problems, new families,
empty nests and sadly, death
and divorce). When the
discretionary sales begin again,
at that point the market will
once again begin to grow.
Imagine a dinner party of
friends on the Isle of Wight with
10 of you around the table; each
being asked what they thought
Island house prices would do in
the next 2 months - go down,
go up or remain the same. 6
months ago 10 out of 10 would,
I suggest, have predicted further
price falls. Now would 4-6 say
that prices may stay broadly the
same? Would one say that prices
may go up. Would two? When
that scene becomes a reality we
will have reached the bottom
of the trough, perhaps we have
done so already. So much of
the market is down to people's
perceptions and their level of
confidence, it does not take
much to turn the tide.
Traditionally it has always been
thought better to buy on the last
bit of the downturn than the
first bit of the recovery. Why?
because when demand increases
there is less choice as people
scrabble to buy what they want
and are forced to compromise
for the fear of rising prices. This
may not be reality quite yet but
is it so very far away?
In the meantime March was
one of our best months for
over a year. This is because
interest rates are at their
lowest ever - for hundreds of
years - and prices have fallen
dramatically. Those that are in
a buying position are coming
into the market knowing this
is a really good time to buy.
Sellers are being more realistic
and accept the current situation.
Prices may still be subject to
some adjustment but for those
buying for the medium-to-long
term is the moment to buy now?
Some would say 'yes', this is why
there is a flurry of buying activity
and, as and when we come
out of the property recession,
this activity should only get
stronger. It is good to remember
that historically the property
sector has always been first into
a recession but also the first out.
It may not have been much fun
to blaze a trail into the 2008
market but we are now looking
forward to the Summer of 2009.
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