The Sunny Side of the Street
One Irish saying goes: May the most you wish for be the least you get.
One is reminded of the late great David Frost’s remark: “With our backs to the wall we can only go forward”, when reading Seeff’s latest press release titled: “Best Property Buyers’ market in decades.”
The press release makes the basic premise that since the outlook for the property market is flat, it is an ideal buyers’ market. Of course buying in such a down market may be very wise depending on ones circumstances. What may be unwise according to Seeff is waiting for prices and interest rates to drop further since one could get caught in a market upswing.
Seeff examines the current world economic crisis and concludes, looking on the bright side of life, that because “buyers and especially investors took a cautious approach” last year, this has “led into one of the most favourable buyers’ markets.” Of course, given that interest rates are at a 31 year low, mortgages are more affordable than ever. Seeff also points out that properties are taking between four and six months to sell. One can optimistically assume that sellers are motivated to negotiate.
Understandably, the classic argument comes up that home ownership is a “comparably safe way of investing money”. Walking on the sunny side of the street, Seeff intones that if you “hold on to it long enough, history has shown that it will generally appreciate in value over time.” It’s hard to argue with that. Since, as is pointed out that stock market investments may yield high returns, they also carry the high risk of capital loss. One can’t argue about the broad stability of property. Of course many investors balance their property and stock market portfolios.
Seeff sobers us up a little with some telling stats. The point is made that average prices are currently at levels similar to four years ago. The ABSA House Price Index indicates a peak in house prices in 2004. Apparently house prices rose by 14.95% in the two years leading up to the global housing crisis of 2007. So from a seller’s perspective a conservative approach is recommended by Seeff.
In fact those sellers not in a hurry to sell are encouraged to wait another year to eighteen months when presumably, Seeff believes, there will be an improvement. A note is made regarding those willing to pay a premium: “There are always exceptions to the rule as buying a primary home especially is an emotional decision and buyers are still prepared to pay a premium in some of the primary housing markets in the major metropolitan areas.”
Clearly estate agents encourage a positive outlook in order to keep movement and flow in a market. There seems to be wisdom in a forward moving outlook and an optimistic approach since stagnation and immobility is all that comes from cynicism and negativity about the market. If one is on the wrong pole of the buyer/seller sphere it is just a matter of time before things cycle there way round. So the glass is half full, right? Right.