New research predicts the future belongs to the rich
UK newspaper The Times and Savills, a publicly-listed estate agent, released a study boldly predicting that only wealthy investors will have clear chances of buying homes in the future. The report states “… The recession has caused a huge shift in the housing market that will lock out first-time buyers and amateur landlords and leave only wealthy families, wealthy investors and Middle East billionaires with a chance of buying… The research shows that in the post-downturn housing market, the sort of new-build flats snapped up by first-time buyers and small buy-to-let investors before the credit crunch will fall into the hands of cash-rich investors and young people in receipt of big parental handouts. At every stage of the new-model housing ladder, equity-rich buyers will dominate; Savills said… Cash-strapped would-be buyers are already being squeezed out of the running by an acute shortage of homes for sale. They are being beaten in bidding battles by buyers with more cash to put down, as sellers see them as safer.”
Savills August 2009 residential research report also stresses their forecast: “… Those best placed to take advantage of this recovery are those investors and developers who entered the downturn with low debt levels, special skills and access to equity. These will become the new and successful players in the residential property market of the future.”
Okay, before the Brits (and perhaps Americans) think about living in campers, let’s set the record straight.
First, consider a real estate services firm that caters to a very affluent clientele. Who else is in the market for their premier listing, a 5-bedroom, £4.5 million property in Essex? They promote their business and inflate their earnings by massaging the egos of the super wealthy.
Second, if ownership is concentrated in the wealthy alone and renting is the only option for the majority, it doesn’t mean that home ownership will be dead. Whatever happened to innovation? You can contact low-cost real estate developers who, apart from profits, believe they can transform a vacant space into an affordable home for a family of four.
Lastly, don’t loose sight of the British “Bull Dog” spirit or the American dream of home ownership. Enterprise, innovation, hard work and perseverance will eventually restore balance to the housing market.