Last week Capel Construction made news when they made a massive reduction in asking price on properties in D15, now more developers are jumping on board both the Albany Group and Abbey Group have reduced asking prices by up to 25% in an effort to get buyers back into the market, I’m sure there is a shortage of smug estate agents ‘taking orders’ for these homes, I think the market is truly at a point where they will have to ‘sell’ these units if they want to shift them. Prices in Holywell (the place where Baiba Saulite was shot) are now at 2005 levels,
The method clearly works as Capel sold 56 units once they dropped the price, so perhaps there is demand out there but its from a public so worried about price falls that they will only purchase if there are considerable reductions in asking price. Personally I don’t believe that some of these prices even represent true value, how will the 56 purchasers feel if the prices get reduced yet again to attract more buyers? They would be in instant negative equity, and that prospect is something that needs to be considered by the would be buyer.
I think the belief that ‘you only lose if you sell’ is not sound, if you have to pay more over the lifetime of a mortgage that is also a way of losing out, people are strange though, for instance, our doors don’t get kicked in by hoards looking to save thousands over the year in mortgage payments but Tesco Petrol which is perhaps 2 cent cheaper than the rest has queues outside of it day and night. This is only one small argument against the existence of a ‘rational market’.
Property is in for interesting times in 2008, one prediction that will come true is that a lot of people will lose jobs this year, in every sector attached to property especially, but apparently there are plenty of software and export jobs available, now we just have to teach my mate ‘Anto the Brickie’ how to turn on a PC so he can re-skill for his new life as a programmer.