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State of the market: Around the block

Written by: Benjamin Jones

Article Overview: At present we are witnessing a multitude of purchasers and vendors alike who are extremely distressed by current market volatility. Whilst we understand that some people don't like change we need to look at the current situation from the bigger perspective.

State of the market: Around the block

First of all the property cycle is a natural and necessary phenomenon. You need to understand that it mirrors the natural cycles of life and is constantly in motion. As in life there are periods of growth, stagnation, decline and rapid volatile movements but it is the individuals who understand the cycle who will adapt faster the fastest and prosper as a result.

At present it is a buyers market and it will be the purchasers that are prepared to act now that will reap the rewards. By acting now before the general market begins to move again you are able to negotiate quite commonly one on one with a vendor which was unheard of only a year ago. As a result the advantage rests with you, the purchaser and sharp buys will be a dime a dozen.

You need to view the fluctuations in the property market as a natural phenomena and look at it from the bigger picture. Short term profit is always great, but long term forecasting and planning is better.

At present the commercial / industrial property market is something of an enigma. Whilst most pundits had predicted that it will follow the residential market and decline further the market has been seemingly rejuvenated by the recent swathe of cuts to the OCR, which in turn are lowering interest rates.

However it's not all smooth sailing. Whilst at the same time the banks have been reducing their interest rates (with a notable lag behind the OCR) they have been increasing the penalty / breakage fees for renegotiating set interest rates on loans. More importantly they have also been demanding up to 40% deposits on commercial / industrial property in some cases. This has obviously provided sufficient reasoning for a number of would be buyers to hesitate.

With interest rates dropping like a stone a flurry of would - be investors / develops have come out of the woodwork, however the majority of them have little to no knowledge of the hoops the banks have waiting for them to jump through. It pays to talk to the bank / financial lender beforehand to get a good idea of your parameters that you can work / purchase within.

Putting all this aside I genuinely believe now is the great time of opportunity as with change comes reward and loss, and it is the smart players that will be rewarded. Individuals who understand that they can sell their property right now for less than they want but use this capital to purchase other properties at a similar reduced price but with a greater potential upside - these will be the people who make the most of this market.

This market epitomizes the iconic saying of 'fortune favours the brave.' Will it favour you?

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Article Tags: cycles of life, decline, dime a dozen, financial lender, fluctuations, hoops, interest rates, natural cycles, natural phenomena, ocr, phenomenon, pundits, purchaser, residential market, rewards, smooth sailing, stagnation, swathe, term profit, woodwork



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