A recent report in the International Herald Tribune has highlighted the fact that property prices are still falling in America – at an alarming and record rate as the doom and gloom in the stock market and the overall economy undermines everything – which leads one to ask the question, how far will property prices fall abroad?
In the US, the IHT report suggests that the bottom is at least months away if not further – and as America seems to be leading the field in terms of crashing prices, this means that markets such as ours in the UK could have a very long way to go before we see a tailing off in terms of the bad news.
In other countries in which ‘wealthier’ or more consumer driven Western buyers like to acquire property, the trough could be a very long time coming as buyers get thinner and thinner on the ground over time. This means that the whole of 2009 can probably be written off in terms of positive pricing appreciation in any of the main property markets in the world. But if you’re a buyer, this news shouldn’t necessarily put you off making an entry and buying a property abroad.
According to another report in the IHT, this time focusing on the property market in Spain, consumer interest levels are high. Many who have commented on the story and who are working on the ground in Spain concur with the overall sentiment in this article, and that is that the overall and undeniable appeal of Spain keeps drawing interest. This can be said of many established markets in the world; it is true of the likes of France and Portugal, of certain specific Caribbean locations and even Australia – but what is also true is that these countries and locations are all also affected by the state of the global and domestic economies.
Therefore, even in a nation where theoretical interest in property remained very high and cash buyers were in relative abundance, the state of the domestic economy in relation to the global one could still massively undermine house values and the health of the property market. Why? Because in very few places in the world international demand for real estate is sufficient to totally support the housing market. I.e., domestic affordability and demand for property will always be a major factor affecting the ebb and flow of a country’s real estate market, and at the moment and for the foreseeable future as we enter a period of terrifying recession, domestic affordability and desirability will be languishing around about the zero level.
So, in Spain international interest in the country’s property market remains strong. Fine – however, people are not buying in! They may be browsing and biding their time until prices fall further, and this action of taking a wait and see approach is guaranteed to bring the market down even further. But if you’re a buyer and you want to make a move at a point when you can still bag a handsome bargain but have the maximum interest of the vendor and have your pick of the property stock, 2009 could be the perfect year for you to pounce.
Whilst other ‘vultures’ will be waiting in the wings to guess the bottom of the market, you can make a bottom of the market offer now and get in ahead of the pack and be the first to profit when prices turn. When prices do turn there will probably be a free for all as everyone scrabbles to get to the good deals and this will of course have the effect that vendors and developers attempting to sell their stock will not have to compromise as far and take as stupid an offer as you may well get away with now! So, we believe that if you want to buy property abroad, 2009 could be your year if you’ve no shame and are prepared to make very silly offers.