We enter the traditional time of year where property transactions in all sectors of the market are unusually quiet - not helped by the global economic downturn. The time of year does not help to kick start any confidence despite some agents offering 'Christmas Sales' to try and stimulate a resurgence.
The majority of vendors assume that the property market starts to come to life in the spring of each year and many wait to see what new property might become available before committing at this quieter time unless either the perfect property appears or alternatively the price is right. In the main the last year has seen a sizeable downturn except to the agricultural industry where prices remained strong, although signs are now clearly emerging of transactions at lower values than those of comparables in the locality a few months previously.
Until the equilibrium between buyers wanting next year prices and vendors wanting last year's price has stabilised, the market is unlikely to see any dramatic change. The global economic downturn will have reinforced opinion quicker than in previous recessions encouraging vendors to drop prices sooner.
In reality there will be few bargain in any sector of the market whether it be residential, commercial or agriculture. Those properties with good pedigree and good location will always remain strong within the market conditions of the time and will normally sell whatever. It is the more marginal and poorer quality asset within each sector that sells reasonably well in a good market but struggles and perhaps doesn’t sell in a poor market.
Buyers need to be aware that if they are looking to buy purely for investment, the traditional phrase of location, location, location is vital and what might appear cheap now will almost undoubtedly not sell as well as a cheaper good quality asset that has the extra flexibility. There are always exceptions and it is at times likes this - just before the market fully bottoms - that the shrewd buyer or investor will make their acquisitions.
Fisher German are involved with numerous clients who have considerable funds in cash to invest but are waiting until the market is balanced before committing. Decisions on investment may have come sooner than was originally expected and many firms have been advising that the commercial market place may be the place to invest again in the second to third quarter of 2009.
Those with large amounts of cash available for investment will be finding the current returns on deposit concerning, and in effect - with inflation at a higher level than that of the credit interest and investment into property sooner rather than later - might be an encouragement to see the market place in some sectors strengthen earlier into 2009.
In conclusion we are going through unprecedented times and property like other investments has been hit, although in reality has remained strong in comparison to other types of investment. Next year is likely to see the opportunity for reinvestment and on the back of that we all hope that the market will start to strengthen and bring confidence throughout.
For further information or advice contact David Merton on 01530 410806 email david.merton@fishergerman.co.uk
