Is it time to buy?
If you've never thought of haggling when purchasing property, now is the time to change your ways.Over the past weeks The Times has investigated a number of residences listed in its property pages, stepping into the shoes of a buyer. The gap between...
If you've never thought of haggling when purchasing property, now is the time to change your ways.
Over the past weeks The Times has investigated a number of residences listed in its property pages, stepping into the shoes of a buyer. The gap between the asking price and what sellers are willing to let their property go for is sometimes quite staggering.
An elderly couple selling a large, centrally-located unconverted house of character, complete with a decent courtyard, for instance, in the end accepted an offer for Lm120,000, a full Lm15,000 below the asking price, which seemed a little on the high side to start with.
Similarly, a developer selling apartments with views in an upmarket area for Lm85,000, shell, was prepared to chop Lm8,000 off his asking price in response to an offer of Lm75,000. Two smaller apartments were brought down to Lm64,000 and Lm60,000 respectively from Lm69,000 and Lm65,000.
The savings would have been surprising five or even two years ago, but not today, a number of property negotiators who spoke to The Times concurred.
"It's definitively a buyer's market," they all insist. But in reality it's not all that simple.
No one wanted to be named but all shared more or less the same view: It's time to buy but one has to be careful as the prices of some property might go down in the coming few years.
A negotiator, who has been in the business for 15 years, said there was an unprecedented glut of properties in the under-200k market.
In fact, when making projections for the market, he pointed out, one has to differentiate between high quality property, which is holding its own and actually going up in price, and maisonettes and flats, particularly in the lower end of the scale.
"You have to segment the market. When it comes to flats, maisonettes and that sort of property, there is an undeniable oversupply; every other house is being pulled down to make way for more flats and they're all competing for the same buyers."
Moreover, he continued, some developers, particularly the inexperienced, are not doing their homework right and are now running for cover, selling at discounted prices due to lack of liquidity.
In the past weeks, for example, there have been at least three advertised, medium-sized residential complexes, which developers have tried to sell at one go, for a reduced price, due to cash flow problems.
Recent figures issued by the National Office of Statistics at first sight do not seem to reflect this reality yet. According to the NSO, in fact, apartments have still seen a 5.29 per cent increase this year over 2006, while maisonettes and terraced houses have respectively seen a 16 per cent and 12 per cent increase over the same period.
Overall, property prices have increased by an average of 4.6 per cent.
However, a closer look at the figures gives a better indication. The monthly analysis shows that since October last year, prices of apartments have seen consistent losses over the previous year, only to gain significantly again in March, this year. There were some months in which maisonettes and terraced houses saw losses since 2005 but nothing consistent.
More significantly, however, the overall property price index shows a consistent drop in price increases from some 15 to 16 per cent back in 2005 to some 8 per cent until March this year.
Similarly, from gains in the 16 per cent region in 2005, apartments initially went up to some 20 per cent by February 2006 but then steadily declined to well under 4 per cent gains by the first three months of this year.
Maisonettes and terraced houses actually saw a reverse pattern, dropping in the first months of 2006 but then slowly climbing back up towards the beginning of this year.
Despite the fact that the gut feeling of the negotiators who spoke to The Times gives a more clear cut picture than the statistics released by the NSO, none of them has a definitive prediction to give investors. It all still rests on subjective judgement; how much of a good buy is the particular property you are trading.
They all agree that, particularly in the apartments sector, there is likely to be an "adjustment" (meaning decrease) in the next few years.
Yet, there will be no crash.
"The key is investing in good quality property at a fair price," one negotiator insisted.
"In the end I expect good property to keep selling," she said.
"There will be hard times for those selling less attractive property, which would have still sold with relative ease up till recently, but now buyers can afford to be choosier."
Over the past weeks The Times has investigated a number of residences listed in its property pages, stepping into the shoes of a buyer. The gap between the asking price and what sellers are willing to let their property go for is sometimes quite staggering.
An elderly couple selling a large, centrally-located unconverted house of character, complete with a decent courtyard, for instance, in the end accepted an offer for Lm120,000, a full Lm15,000 below the asking price, which seemed a little on the high side to start with.
Similarly, a developer selling apartments with views in an upmarket area for Lm85,000, shell, was prepared to chop Lm8,000 off his asking price in response to an offer of Lm75,000. Two smaller apartments were brought down to Lm64,000 and Lm60,000 respectively from Lm69,000 and Lm65,000.
The savings would have been surprising five or even two years ago, but not today, a number of property negotiators who spoke to The Times concurred.
"It's definitively a buyer's market," they all insist. But in reality it's not all that simple.
No one wanted to be named but all shared more or less the same view: It's time to buy but one has to be careful as the prices of some property might go down in the coming few years.
A negotiator, who has been in the business for 15 years, said there was an unprecedented glut of properties in the under-200k market.
In fact, when making projections for the market, he pointed out, one has to differentiate between high quality property, which is holding its own and actually going up in price, and maisonettes and flats, particularly in the lower end of the scale.
"You have to segment the market. When it comes to flats, maisonettes and that sort of property, there is an undeniable oversupply; every other house is being pulled down to make way for more flats and they're all competing for the same buyers."
Moreover, he continued, some developers, particularly the inexperienced, are not doing their homework right and are now running for cover, selling at discounted prices due to lack of liquidity.
In the past weeks, for example, there have been at least three advertised, medium-sized residential complexes, which developers have tried to sell at one go, for a reduced price, due to cash flow problems.
Recent figures issued by the National Office of Statistics at first sight do not seem to reflect this reality yet. According to the NSO, in fact, apartments have still seen a 5.29 per cent increase this year over 2006, while maisonettes and terraced houses have respectively seen a 16 per cent and 12 per cent increase over the same period.
Overall, property prices have increased by an average of 4.6 per cent.
However, a closer look at the figures gives a better indication. The monthly analysis shows that since October last year, prices of apartments have seen consistent losses over the previous year, only to gain significantly again in March, this year. There were some months in which maisonettes and terraced houses saw losses since 2005 but nothing consistent.
More significantly, however, the overall property price index shows a consistent drop in price increases from some 15 to 16 per cent back in 2005 to some 8 per cent until March this year.
Similarly, from gains in the 16 per cent region in 2005, apartments initially went up to some 20 per cent by February 2006 but then steadily declined to well under 4 per cent gains by the first three months of this year.
Maisonettes and terraced houses actually saw a reverse pattern, dropping in the first months of 2006 but then slowly climbing back up towards the beginning of this year.
Despite the fact that the gut feeling of the negotiators who spoke to The Times gives a more clear cut picture than the statistics released by the NSO, none of them has a definitive prediction to give investors. It all still rests on subjective judgement; how much of a good buy is the particular property you are trading.
They all agree that, particularly in the apartments sector, there is likely to be an "adjustment" (meaning decrease) in the next few years.
Yet, there will be no crash.
"The key is investing in good quality property at a fair price," one negotiator insisted.
"In the end I expect good property to keep selling," she said.
"There will be hard times for those selling less attractive property, which would have still sold with relative ease up till recently, but now buyers can afford to be choosier."