In the beginning of the year, 2020 was dubbed "Twenty Plenty" by stockbrokers, due to record highs in stock markets across the world. The markets have changed significantly since then, but the moniker could aptly apply to the property market as there will be a significant number of opportunities.
We will be writing a series of four articles giving investors and purchasers an insight into the changed landscape and the best way to navigate the market. This article will set the scene and the three follow up articles will give details on the best way to go about purchasing an investment property, a home, and a holiday home.
The scene
There will most certainly be an increase in the supply of properties, however, there will also be market forces that will mitigate the amount of properties reaching the market. Some of these forces include sellers delaying immigration, sellers not upgrading and fewer speculators / "part time" developers. This will mean only serious sellers with a "need" to sell will be left in the marketplace. A large proportion of these sellers will have an urgency to sell their properties. These sellers will be looking for clean quick transactions. Similarly, developers and their financiers will be seeking the comfort of seamless transactions.
At Hunt Properties we do not believe in any party "winning" a transaction. We believe in parties successfully negotiating a mutually beneficial agreement where both parties "win". Aggressive "low balling" will be unnecessary. The comfort of liquidity will be enough of an incentive for a seller with an urgent necessity to reward a purchaser with substantial subpar price.
To negotiate correctly, you need to be prepared.
In conclusion do not fall into the trap of waiting in anticipation of homes being repossessed. Firstly, there is no guarantee that there is going to be a large proportion of homes that will face closure with the government providing a large stimulus package and financial institutions having time to prepare of the economic downturn. Secondly and most importantly, good properties that will hold their value through tough economic times, grow at a quicker rate in the good times, and that provide a solid return on investment, will not make it to the auction lot. A far better strategy is to be prepared, identify the right home, and offer a solid seamless deal to the seller.