WHAT IS THE PRESENT STATE OF THE LOCAL PROPERTY MARKET ?

We are now into the 8th month of 2007 and this year the property market has been experiencing a transition in terms of demand and supply.

It was our experience during January, February and March that a lot of properties came onto the market but were not selling as quickly as in previous years. By April there was a build up of properties on the market and it was at this stage that buyers started to flex their muscles and a lot of these properties were sold at the expected price levels. Buyers, unlike in the previous 3 years, were beginning to take time to look around due to the higher supply level. Because the market has become less 'frantic' the percentage price increase levels have been reduced making life easier for buyers.

The seasonal factor which was always present up until 3 years ago has come into play again, particularly when you look at how the market quietened down from mid-June through to the end of July. A lot of properties have come onto the market during this period but buyers have seemed more interested in travelling to sunnier climates because of our poor weather. An increase in activity was very noticeable within the past week, assisted by rather better weather, and individuals keen to buy.

The market is therefore leaning back towards the trends of up to 3 years ago and the frantic pace that was so evident has gone out of the market to a large degree. It is my opinion that there is still very strong activity in the market and it is moving along at a healthier pace. The days of buying today and selling in 3 months time for a very healthy profit have come to an end for the time being. That sort of pace was never going to last.

What is the reason for this? It is my opinion that there have been a combination of factors. Firstly the increase in interest rates has introduced a more cautious approach. Secondly this more cautious approach has been encouraged by elements of the national media. There seems to be less to report nowadays and therefore property has been a focus, spreading an element of fear into the market. Finally the slow down in the southern market has also been a focus despite the fact that it was never a serious influence on our market when it was at its height. We have never experienced a large number of southern buyers in our market and therefore the southern market should not have any influence. Out of the three factors highlighted above the only genuine influence is the increase in interest rates.

A lot of properties have been placed on the market this year and it is my experience that most of the properties are owner occupied, not investor owned. On the one hand you have people who wish to move up the property ladder and on the other you have people who wish to downsize. People will always want to move house for various reasons and the current signs continue to be healthy.

The only negative factor we have experienced is that investors have taken a step back and are presently consolidating their position. One thing about investors is that they will always keep a keen eye on the property market. The majority of rental properties are let out and occupancy levels are reasonable, assisted by the influx of immigrants to the area, which means that the majority of investors are content to hold onto their properties. Rental levels are not fantastic but property should be viewed as a long term investment and not for the short term gain.

First time buyers continue to find it difficult but the removal of the 'frantic' factor will assist the first time buyer in the long run.

There continues to be plenty of activity in the market but just at a lot slower pace than previously. We are basically experiencing a 'normalisation' of the market and therefore sellers will have to be more patient when selling their property.