Making predictions is becoming more and more difficult.
I recall in December 2008 (easily the worst year in our industry in living memory) thinking that 2009 was probably going to be a tough year. It turned out to be one of the best for Mackenzie Smith for many years. Hindsight is of course a luxury but on reflection what really happened was that eighteen months of business was squeezed into twelve as decisions shelved were finally actioned in 09 as people realised the world had not quite ended…
So what is in store for 2012? Well I still think that there will be a shortage of property coming to the market largely driven by exceptionally low interest rates enabling home owners to sit tight and hold off making decisions. The contrast between now and the last major housing market decline (89 – 94) is that interest rates were considerably higher and this coupled with a far less sophisticated lettings market forced Vendors to downsize. Although job security is still a factor it is now predominantly focused on the public sector whereas in 89 – 94 the private sector recruitment market remained unpredictable for a much longer period.
The private sector has had to deal with a much more rapid recession this time around and most companies realised that they had to sort out their cost base very quickly…
So what does this mean for anyone selling or buying in 2012?
Well if you are selling you will – depending on the market and area you occupy – find that you will get many conflicting signals from Media &, Estate Agents. If you are selling a property where there is less reliance on mortgage funding then you should find yourself in a position where locating a buyer should not prove difficult. Selling a property to say first or even second time buyers will mean that you will need to be even more aware of values as this will be a key factor.
For those buying they may find that despite negative media commentary the supply and availability of property is tight and that they will be competing with other well funded and determined purchasers. They will also find that in some cases the values of these homes (In the main, detached individual homes in good locations) will sell quickly and for a good price.
The market will also be driven by the media; it’s no coincidence that when there is no news (the best kind) then we operate in a more consistent balanced market.
For those Builders selling in 2012 you will be providing much needed housing and I expect demand to be high.
Ed Mackenzie Smith