carolk

R.I.P
Property developers out pricing themselves?
I think you are right cos, they are doing both at the moment and something has to give!!
 

mikehibb

Member
Property developers out pricing themselves?
There will always be good money around to pay for good properties with good location etc. But you need to be in for the long term.
I do not look at property as a short term investment to turn a profit, if I did, I would either be rich or bust, I am not prepared to take that gamble.

I think what we have seen recently ( and I do not just mean Turkey, I include other countries and primary homes in UK) is people relying on the property bubble as a short term investment, or people buying thinking that they can rent out easily to cover the costs.
Up until the recent recession banks were financing this on easy terms, credit was available and of course developers took advantage of this.
Many told how the property would increase in value, how people would be able to rent out at a few hundred quid per week etc.
This I believe led to people that would not have normally taken the gamble thinking that they wanted to live the dream and make a few quid too.
But we all know what has happened these last couple of years.

What I think we will see, well we are seeing it already, is the fly by night operations will go bust, people who budgeted sensibly and do not need to rely on rental income will survive, if they were after a profit they might eventually see one but not for a few years.

Those that looked for the long term, and I am guessing at the upper end of the market in established sites, will not be so worried.

Natural selection will determine which developers survive, there have been many upsetting stories on the forum about peoples purchasing problems, but there also have been many people that have had great sucess.
A developer who offers a proffessional service, great properties at a realistic price, location etc with a good track record will still manaage to build homes and turn a reasonable profit, after all they are in business to make a profit.

What I think we will see ( I hope) is developers needing to be able to raise their own funds to get the sites up to near completion stage.
(ie fully built site externally, you can choose your interior fit out spec)
The only developers that will be able to do this are the ones that do have a proper credit rating or serious backers.

The days when someone will part with a big load of dosh based on promises and some fantastic brochures full of architects impressions are now gone.
The savvy purchaser wants to see the site near completion, or buy resale
If people still want off plan, then the developers will need to accept a much smaller deposit, this does not however guarantee anything, just means the purchaser loses less if the developer has problems, a risk that any off plan buyer needs to accept.

Personaly I would still go resale or 90% complete, not prepared to go off plan.

Maintenance costs where we are are quite reasonable ( we thought them to be on the high side at first) but on reflection and after speaking to others it appears that we do have a good deal.
Gardens watered every other day, grass cut and weeding done once a week. (during the growing season obviously less in off season) Pools constantly cleaned etc. However we do have a residents committee and a recently well attended annual AGM.
 

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