I have been asked this question a lot, especially in 2015. Heck, even my tailor asked me to look out for a good property for him in his location of choice. He said that he trusted me not to hike the price up as other RENs sometimes do. I was flattered. Unfortunately, his location of choice was out of his budget. So I suggested some areas close to his place of work where he could get good value for money.
The property market in 2015 has been what industry experts call “cold”. What that means is that there have been fewer transactions. What does that mean?
It means that fewer people have been buying properties. The reasons are many: from not confident enough to speculate, loss of jobs, poor business, higher cost of living and therefore less money to take on a mortgage, lack of confidence in the way the country is run and poor investor sentiments. I could write paragraphs about this but I think you get my drift.
I have also seen many properties being sold below market value because the owners can no longer afford to hold them. It could be because they were speculators who hoped the rental would help cover at least some of the mortgage. Neither could they sell the property at fair market value.So as a last resort they dropped the price. It is either drop the price or risk an auction.Not wanting to lose out on all payments made to date and wanting to save themselves the embarrassment of having a property auctioned, dropping the price seems like a good option.
Or they may have lost their job and can no longer afford to maintain one or more properties. Maybe they have to move in with the parents in order to meet all other financial obligations.
The fact remains that buying a property is a long term investment. As such you should clearly determine your purpose and budget. (Please refer to blog post on ‘Buying for your own stay or for investment” dated Nov. 11).
Yes, now is a good time to buy property if you can find one that suits your purpose as you are more likely to find one that is fairly priced or even below market value. Remember that property owners in choice locations have higher holding power and are not likely to lower their prices too much- only if they really need to sell.
Now is not a good time to sell your property as it is likely to stay on the market for a long time. Purchasers are likely to want to negotiate more too. But if Lady Luck is on your side and you have a good property to sell, you might just get your asking price. All the best!