This summed up many similar observations I heard when I was the moderator at the annual Property Forum for the Australia-Israel Chamber of Commerce last week. At the full house of more than 580 property specialists and observers talking property, I heard about:
Off-the-plan projects that have no hope of getting out of the ground.
But while the anecdotal evidence seems to suggest the property market is a lot worse than the statistics are showing, it can create opportunities for those with the finance and a long-term plan.
Successful investors don't go into their bunkers during these downturns, they look for opportunities. They don't invest when markets are hot, they invest when everyone else is running. They know that markets run in cycles. Booms never last and busts always turn.
Markets, no matter whether shares or property, swing like a pendulum to extremes but, inevitably shift back to the centre.
Investors with cash or finance arranged have not been in this position for years. It's a time to put in what previously would be regarded as silly offers. You just never know how desperate some vendors are particularly if they've negatively geared beyond their means and are now faced with vacancies and falling values that are making financiers nervous.
I have relatives interested in a house well beyond their means which first went to auction in May. It was passed in and has subsequently fallen in value and my relatives have simply sat there and watched the price fall by more than 15 per cent to within their reach.
Property developers are also desperate to get their projects off the ground and are willing to negotiate heavily to secure off-the-plan sales. The downside is if the project doesn't go ahead, but investors can be protected by ensuring they have the right "drop-dead" clause.
Remember that many bankers are simply not lending on off the plan, so make sure you have the necessary finances locked in before you start negotiating. Also, take advantage of the property downturn to move in to a better area that is becoming more affordable.
KPMG property guru Bernard Salt told the property forum that capital cities were spitting out baby boomers who were opting for the sea change lifestyle. He believes the coastal areas will continue to be hot spots for decades. Many of those areas have become overpriced in recent years but, like the rest of the residential property market, values have softened and could offer an opportunity to get on the merry-go-round.
You can see this property downturn as either a disaster or an opportunity. Successful investors see the latter.
Buying off the plan
