9
Mar
The earlier recovery?
For those keen to buy prime property at the bottom of the market,
timing is of the essence. A bargain could turn into a highly
valuable asset in the years ahead, especially when purchased at
exactly the right time.
If it is indeed the case - as some believe - that the property
market is soon to hit the bottom, it may make good sense to listen
to those who have rejected the more gloomy views being aired about
the future and look at any positive evidence that may suggest
better times are on the way.
While it is, of course, impossible to gaze into a crystal ball and
be sure when better economic times will come, some have sought to
at least bring some balance to contemporary debates in the face of
more pessimistic projections for the future. One of them is Bank of
England monetary policy committee member Andrew Sentance, whose
view is that the start of the recovery could be a lot nearer than
many think.
In a speech at the Institute of Economic Affairs in late February,
Mr Sentance commented that the experience of recession was much
more common in the 1970s and 1980s. The fact that the last
contraction - that of the early 1990s - was relatively long ago may
have brought an overreaction, he remarked, one responsible for the
various "apocalyptic and hyperbolic" responses many have
expressed.
The current downturn, Mr Sentance observed, has plenty in common
with those of the 1970s and 1980s. The depth of it has so far been
similar and the speed at which boom has turned to bust is
comparable as well. He commented that if the current downturn
continues to follow a similar pattern, business confidence should
be seeing an upturn around the middle of the year, in line with the
Bank's central projection.
Such words may now have substance, for the latest BDO Stoy Hayward
survey on business confidence has suggested the worm may be
turning. The Optimism Index was still low at a figure of 90.5 in
February, but this represented an increase on January's 89.9, the
firm noted. It was the first rise in the index in 13 months and BDO
said this may be because businesses now believe they have made the
necessary adjustments to see themselves through the
recession.
Commenting on this, partner at the company Peter Hemington stated:
"It's still too early to say if business confidence has hit rock
bottom and we've already seen a number of false dawns, but this
month's modest increases are encouraging. We must watch carefully
to see if this is the start of an upward trend."
If indeed it is the beginning of better times, or if they are
close, then optimism could quickly spread through the economy, with
the property sector potentially one of the areas that would benefit
from this. If so, then those looking to buy top end real estate may
find that doing so just as the economy starts to recover will bring
lasting dividends.
