Wed 13 May 2009
On Friday 13th February this year, after six weeks of much increased activity in the market, I wrote a blog suggesting that the property market was showing distinct signs of nearing the bottom and that there were definitely some green shoots emerging. Needless to say, I was shot down in flames by a number of commentators who seemingly didnt want to believe that there could be anything but a recession ever again and although its probably too early to say I told you so Im confident that my earlier observations were not premature.
This is the third recession I have worked through and whilst this is the most pronounced, it is plain to see the similar paths that the downturn has taken:
Over ambitious lending
Denial of a problem
In terms of spotting the problems, the property market is always the canary in the coal mine. The London property market was the first into the recession in mid 2007 and I vividly remember discussing the state of the economy with colleagues, in other industries, who thought I was overreacting as their business was still sailing in calm waters.
And heres the point: IT WILL BE THE SAME STORY ON THE WAY OUT OF THE RECESSION with property, especially in London, leading the recovery a good four to six months before other areas of the economy follow suit.
So, in my view, the market has reached the bottom and will gently recover throughout the rest of this year before becoming much more active next year (incidentally, the Financial Times reported similar findings this week). Not huge price rises, the fear of unemployment will put a brake on that, but real recovery all the same.
For those considering buying theres no doubt in my mind that now is a great time to buy property. We are as near to the bottom of the market as makes no difference in what should be a 2-5 year investment.
These are interesting times and in my view, by the autumn, there will be a lot of people thinking 'if only'