My 2010 Real Estate Industry Forecast
Posted by Debo on January 14th, 2010
2009 is gone but I really don’t know whether it’s been forgotten or will be in a long time to come. However, forecasting what 2010 may turn out to become is no small task. This is so particularly because of the way 2009 played out. The degree of economic challenges we are witnessing now can be said to have sneaked in unnoticed. At this moment, I wish I had a crystal ball to consult, but I don’t.
Well, market indications at this moment in the real estate market informs that the depression is still very much there and worsening as the credit crunch persist. Property stock list continues to increase as new ones join the existing edifice available on offer. The little money left in the system continues to enjoy the overtures of numerous property options. Buyers continue to set the pace and prices continue to plunge. A lot of real estate firms are having to re-strategise seriously to remain in business.
In my own opinion, much of these will continue well into 2010. This is expected to be further fuelled by the spate of retrenchments especially in the banks. With recent developments, the re-emerging middle class seems to be an endangered specie. Both commercial and residential real estate are expected to remain flat and may even worsen except the following happens:
- The Country takes a decisive step about the problem the ill health of Mr. President has caused and is capable of causing before it gets really out of hand.
- The debt management operation instituted to mop up toxic loans from the banking system and Capital Market Makers takes off effectively
- The 2010 budget is a spending budget and it is implemented. Government remains the biggest spender in our economy and the fiscal policy in the new year will determine the path direction the economy will tow.
- Being the year preceding an election year, politicians and their cronies are expected to put a lot of their real estate interests out for sale as they unleash all arsenal towards raising funds to fuel their campaigns. The implication of this is that the glut may continue for a little longer.
It is not all gloomy though as rental property is expected to stabilise within the middle to low income properties due to anticipated increase in demand.
New town and emerging market developments will still provide the attraction investors require to play in the real estate sector. To this end, government sustained infrastructural development will further boost trade. I fore see a situation where must investors and property market stakeholders will head for the bottom of the pyramid. Finding marketable real estate solutions for the poor with strong fundamentals to support business interest must be the crave of every discerning investor this year.
Sincerely, 2010 is the year every entrepreneur MUST put on his/her thinking cap to remain in business. There is need to diversify concentrically or otherwise.
It is a year clients will further scrutinise offerings before they part with their hard earn money. For example, I have a client who has not been able to make up his mind on what to buy for about a month now even though he has inspected almost all we and some other companies have to offer, asked numerous questions and gotten answers to all of them. When it’s time to pay, he comes up with another thing that may take us back to where we started from. Things that ordinarily would not matter or be an hinderance in a booming economy but can drag sales because it is a buyer’s market right now and may remain so for a longer time to come.
One last thing, please watch your cashflow very closely in the coming year. As it is said, cash is the life/blood of any business. You may want to do periodic appraisal of your cashflow to ensure positivity is maintained always. If you can get it, do all that is in your capacity to establish an overdraft line now especially if your projections suggest the need may arise sometime soon.
This is the much I have to say for now and I hope it will prepare you for the challenge ahead. Seasons greeting!
To your success!