It all seems that things are slowly coming back to normal. Properties are actually selling. What I want to know is:
Who is buying!
First time buyers? They must be getting help from Mum & Dad
Second time buyers? If they have sold to first time buyers then they can buy now
Investors? Well they have always been buying!
So what does that mean for us investors? Well it means more competition. Currently we all pretty much in the same boat. A 25% deposit is needed no matter who you are. So first time buyers do not have that advantage they did pre-2007 when they could get 125% mortgages which was based on their personal income rather than the rental income.
This sounds like an obvious statement but I will make it anyway. The price of property will BOUNCE back when the banks release a first time buyer mortgage product which is 90%+ LTV and widely available.
Then all that pent up frustration will trample all over us. You can say good bye to us as property prices rocket. I know some economists will say I do not have a clue as unemployment is creeping up on us to bite us where it hurts.
However as long as unemployment does not hit 10% of the working population then I cannot see why we cannot prevent the domino effect of unemployment and see our economy bounce back also. (Am I just a deluded optimist or what?).
The positive news is almost becoming predictable now. House prices will be higher next month, mortgage approvals will be up next month, estate agent sales will be up next month and the number of property sourcing companies being started will be up next month!
If you want to beat the first time buyers before they beat you request a callback!
Posted on: 12th Aug 2009