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My predictions for the next 12-18 months...

15th September 2009

monopoly house mag glass for blogWow, what interesting times we live in! Property Prices seem to be on an elaborate rollercoaster depending on the area that you live.

One day prices are rising, the next falling, i think the property investment market needs some stabilisation so investors can find their legs again!

Personally i think this may be right around the corner.

I believe that for once the government may have actually got the result that they wanted, even if they will achieve it in a way i doubt they could have expected!

What do i mean?
It’s quite simply a matter of demand and supply and it’s one which could impact us all so pay attention!

Around 12-15 months ago the vast amount of new build property developers stopped starting new developments and started land banking. No property developer would start a site that they thought would actually lose them money!

This was fine at the time, there were more than enough new build developments going to keep most property investors happy, in fact if we are honest there were probably too many!
It’s easy to say that the UK needs to build x amount of housing to keep up with demand, but if that housing is mostly luxury apartments in city centres, way out of the price range of joe bloggs then it does not really equate!

What we are now seeing is the end of many large property developers redundant stock, most sites are now finished and developers are just about to start building again.
This will dramatically impact on property investors and property investment companies, how? because for the next 12 months + we will see little to no new build developments being offered.

“What of all the off plan deals” i hear you say.

Well if you put your hand in the fire and it gets burnt, you don’t go back for a second go do you?
If developers start offering off plan opportunities that is exactly what they will be doing!
It is a lose lose situation for a developer.

  1. They offer the property off plan and the prices continue to rise – Result – they have lost out on potential profit.
  2. They offer property off plan and prices drop – Result- what seemed a smart bet turns into disaster as property investors decide not to complete as the promised 25% discount has been eradicated by price decreases!

Summary – Developers can’t win!

So we are faced with developer not offering discount on their property until they have completed the site and explored every other selling option!
This has to be at least 12 months from now for even the quickest builders!

So what would i do?

Buy now!! Were on the way to a mini price rise where property investment demand suddenly rockets past supply!

If you can get it right you can grab the last of the good discounts now and sell or remortgage in 12 months time when prices have risen.

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