Place Your Bets: When Will the Property Market Bottom Out?
Today’s a tough one, as I’m asking the question: when can we expect to see the property market bottom out? Despite my unfortunate lack of crystal ball, and therefore, lack of ability to provide a date and time; if you have a read below, I have some food for thought to help us hazard a guess…
Given the current pandemic, it’s an understatement to say we’re in strange times. Before this hit, the property market was already becoming more saturated, as the awareness around the industry has increased substantially in recent years due to the rise of the internet. Contrary to what the sensationalized headlines from the media will tell you about property prices dropping, we have actually hit mini-boom. Due to the considerable about of money the government have pumped into the economy, plus the numerous incentives to buy, such as the temporary reduction/removal of stamp duty, it’s of no surprise.
But will it last? Absolutely not.
This year, we dropped around 2-3%. However, bear in mind that we have a small drop year on year anyway, plus the factor of having 15% less stock on the market as well. We’re hitting around 97% of sale prices, whilst selling the same volume of properties but with less stock – meaning that we’re performing at roughly the same sort of sell prices.
The government have introduced several economy-boosting initiatives. The furlough scheme, the £1000 employer bonus for every employee they take back full time, grants, mortgage holidays, stamp duty reduction as mentioned before, and the green deal, to name a few. The green deal, in particular, is fantastic as it creates more jobs, helps the environment and kickstarts jobs. However, the government is printing more money than they have ever printed in history. For the first time ever, their debt is bigger than the actual GDP of the whole country. In fact, the last time we’ve seen anything similar to this was the depression in the 1930s. Although, as of yet, we’re not feeling the full impact of this; it will have a huge effect of inflation and deflation.
Although the government’s efforts will soften the downturn, we’re still going to hit some really rocky times. But when? As I said – I have no crystal ball to predict an exact date and time for you. However, I would hazard a guess that once the incentives start to run out, so will our luck. This could be anytime between October until the end of the year. As it’s so uncertain, you have to ask yourself the question: do you buy now while we’re on the way down, or when we’ve hit the bottom? Personally, I’m not waiting – as the current climate is still a great one to buy in. If you’re smart with your deals, there is never the wrong time to buy, however, waiting around could mean missing out.
What are your thoughts though? What are your predictions for the market in the coming months? Do you plan to wait it out? I’d love to hear – although, remember, when it starts climbing again, it won’t be a buyers market. Let me know your opinions in the comments, perhaps someone reading this does have a crystal ball after all?
As always, if you don’t evolve your ideas, you’ll never live on your own terms.