Stability returning to the markets...
Hey guys,
Just wanted to update you all on the current state of the market. The first thing is that the credit crunch is over. I think it ended about a month ago as the mortgage markets settled down and the mortgage products stopped getting pulled every other day.
The credit crunch was about the flow of money into and out of mortgages (in particular about the US mortgages) and this was the major thing to be attacked. If you remember a previous blog about when the US coughs the world sneezes, well thats exactly what happened. The US mortgage markets coughed and the world mortgage markets sneezed. Thankfully the sneeze is over. Markets have adjusted and things are returning to normal.
The good news throughout all this is that prices have not crashed, in fact they have held generally well. That's not to say that we won't see a general decline in prices throughout 2008 but I still believe that 2009 will see a recovery and the beginnings of growth in the market again.
Now is the best time to buy property, our ridiculous offers are being accepted.
Now I am not saying that the credit crunch hasn't affected the market, it definitely has. At the end of April two of our larger competitors went into liquidation, the amount of property being launched has dropped off considerably and even my business has had to deal with raising interest rates (on new purchases and remortgages) and extended periods of conveyancing due to the affects of more cautious lenders as well as Money Laundering regulations. It seems that things that normally have taken 28 days are now taking 2-3 months.
I had a chat with another property club owner in January and they had serious concerns about a lot of the off plan property they had sold that was completing throughout 2008. They had sold it as a no money down and because the market had changed their clients were in serious trouble of not being able to get a mortgage. It's one of the reasons that I shy away from long term off plan especially in the last 4 years.
Now is the time for Off Plan!!!
I actually think that given the market and where I think it is heading; off plan will now become more and more of a viable option over the next 2-3 years. Let me explain. Right now developers are hurting due to lack of sales and a lack of mortgages that are available. They are happy to accept the lowest possible offers on property. At the same time the market will drop or stagnant over this year and the throughout 2009 is will begin to increase. By 2010 it will be back to business as normal. This will also mean that anything that you buy now will be worth more in 2010. The great thing is that by doing off plan you can avoid the next year of market turmoil.
Live with passion,
Brett Wood
PS. One final point about the credit crunch. I have said from the beginning that once stability returned to the market then competition would follow it. I am not bold enough to say that stability to back 100% but it certainly it is looking better.