These past few months have certainly been busy ones. We are finally starting to see sales materialize as property prices reach their lowest point and buyers realise the possibility to purchase a good property at very good price, possibly the lowest price the property will be at in this current market.
During the last weeks different media have been talking about possible signs of recovery of the real estate market. In the Spanish El País, on the 31st of March, an article published online mentioned that the worst part is over. Gonzalo Bernardos, head of the Masters degree in Real Estate consulting and vice-chancellor of the University of Barcelona points out that “sales this year will increase, a lot”. The article described Bernardos as a pessimist who was harshly criticised in 2006 for predicting that property prices would fall by 20% between 2007 and 2009. The article goes on to mention that decreasing interest rates, prices and mortgage instalments, favour the recovery of the real estate market. Moreover according to Bernardos, equity investors will return to real estate after the crash of the stock market.
An article from the Telegraph online of the 8th April 2009, mentions how after 2 years of property prices falling we may have arrived at the right moment to purchase a property and comments that “it isn’t just in the residential property market where analysts are tentatively talking about the bottom of the market”. It was reported this week that Sir Stelios Haji-Ioannou, the founder of Easy Jet, is planning to invest in commercial property, on the expectation that prices could turn around soon. As mentioned earlier, we are starting to see how buyers regain their confidence in the property market, and the article adds that besides the fact that property prices have possibly reached their lowest point “there is another reason why investors from Britain, as well as overseas, might be looking at property again: rock bottom interest rates”.
Of course, as the article mentions, the property market recovery is linked to an increase in approval of mortgages. However there are those who have a more negative outlook on the situation, predicting that property prices will keep on falling throughout 2009. When the price drop eventually does come to a halt it won’t necessarily mean that property prices will rise again says the article, it’ll mean that the market will have readjusted its prices through its natural way of doing it, through the law of demand and supply, bringing property prices to their “real” value.
Pam O’Connor, CEO of one of our networks, Leading Real Estate Companies of the World comments on another recently published article titled “Why First Home Buyers Should Purchase Now”, that “Despite the negative things you read about people losing money on their homes, if you bought before 2005 in just about any market, you are still ahead of the game. Prices went up 60-90 percent from 2000 to 2006 (compared to about 25% in each 5-year period dating back the 40 years before that, so that is why prices had to fall from that unrealistic rise. Don’t buy to flip or speculate, but to enjoy living in your home and building equity over time. As the CEO of a national real estate network serving diverse markets, I can tell you with confidence that if my 17-year-old daughter were out of college, I’d be urging her to buy a home….today!”. Pam O’Connor is based in Chicago, Illinois.
Even though the article talks about the USA, what is said can certainly be applied to the Marbella Property Market.