Nick Churton of Mayfair International Realty wonders whether, instead of taking too much heed of real estate market predictions, we shouldn’t all just get on with it.

Warren Buffett once said, “In the business world, the rear view mirror is always clearer than the windshield.” It is the time of year when some in the real estate game are tempted to look into their crystal balls and predict what will be happening in the market in the year ahead. A quick look at how correct last year’s crop of predictions from industry spokesmen faired shows how right Warren Buffett was. These outpourings are never reliable, never really change anything and are pretty soon forgotten – if they were ever remembered in the first place.
 
What really affects the market is confidence and that’s something that is impossible to predict. Confidence doesn’t come from an upbeat industry or government prediction. It creeps unseen and unnoticed into the national psyche.  The winners in real estate are often the ones that receive the confidence message sooner that others do.

Borrowing in many countries remains difficult and new home starts frustratingly low. For the first time in decades home ownership for many has become the dream of the few. National economies are more than ever tied to the behaviour of each other, there is political tension in various global commodity rich regions and these, plus other unknowns which could affect the market, seem to render prediction pointless.

Yet our member firms across the world have seen better trading for the fifth year running since the banking crisis.  Are homebuyers choosing to enter the market because national circumstances suggest they should?  Hardly.  It is because personal or family circumstances suggest they must.

Market excess is caused though an imbalance where discretionary investors sense the opportunity for a significant short-term capital gain with little risk. A balanced market is when risk aware buyers need a property as a home first and perhaps a long-term investment second.  Right now we are in a more balanced market.  Some predictions suggest that it will not be until 2019 when we re-attain the heady days of high property values.  But then, frenzied buyers - encouraged on by delinquent bank lending, drove the market until if fell off the cliff.  So all I want to say about the future is that we should all be careful for what we wish for.