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Just the time to invest?

11th December 2008 | back to article listings BACK    print this article PRINT

To read the views of some, the property market may look particularly bleak just now. With house prices falling, the economy worsening and buyer numbers low, many would regard the near future as a period that investors should write off and wait for better times before re-entering the market.

Some might draw such a conclusion from the findings of a survey by property website FindaProperty.com. According to this poll, 88 per cent of buyers expect prices to fall over the course of 2009 as a whole and 79 per cent expect transaction levels to be either the same as now or lower. Only 17 per cent forecasted that there will be signs of recovery by the end of 2009.

Eventually, the respondents agreed, there will be a recovery, but 70 per cent said it would emerge two years or more from now.

Commenting on the findings, content editor for the site Michael O'Flynn stated: "Feeling somewhat at the mercy of market forces, buyers expect 2009 to be another turbulent year in the property market overall, but are hopeful that 2010 onward will see a recovery in transaction levels and prices."

But if 2010 and beyond will see the emergence of better times, should 2009 be a year in which investors sit on their hands? Chairman of online change of address service Iammoving.com Simon Preston believes emphatically not.

"I am a great fan of the expression: 'When other people are stalked by fear, you should be doing your deals.' It may well be that the next 12 to 18 months is a good time for people to invest in property."

Arguing that the pressures of "repressed" demand and a lack of newly built homes will be brought to bear on the market when the recovery comes, he forecasted: "In two years' time the property market will bounce back and will go up at rates substantially ahead of inflation."

This, he suggested, is part of a cycle that is now endemic in the property market, one in which there will be boom and bust and where in the latter case the inflation rate will be exceeded by the appreciation of property values.

Mr Preston said his guess was that the bottom of the market will be reached at some point in 2009. This being the case, next year may be far from the worst year for investors to look to add to their portfolios. By buying then and waiting for the sort of market pressures that led to above-inflation rises in recent years to reassert themselves, those who do so may be making the wisest choice of all, while those who are "stalked by fear" and wait for clear signs of recovery may be the ones to miss out in the long run.

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