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April 2009

MAYFAIR RESIDENTIAL MARKET REPORT ON Q1 2009

VOLUME OF SALES DOWN

Q1 2009 – The number of sales in Mayfair has been dire with volume of sales way down on previous years.

In £ value terms the bids (offers received on property for sale) are 25% off the peak 2007/8 selling figures BUT most vendors are not accepting the bids hence low volume of sales.

The 2003-7 average for Q1 residential sales in Mayfair – 48 sales
The 2008 volume of sales for Q1 was – only 18
The 2009 volume of sales for Q1 was – JUST 7

In two of the months out of the last 6 months Wetherell had a record market share of 100% of all sales. To achieve this statistic we sold only 3 properties!

GREEN SHOOTS?

Press speculation is now on the “green shoots” of recovery.
Based on the amount of viewings over the last few months in Mayfair then the answer is yes.

If based on the amount of offers then again the answer is yes. If on the amount sold -sadly no.

However the small amount of recent sales and “off-market” deals indicate that prime property is still selling well and serious buyers are trying to tempt out the sellers with attractive selling prices.

SHAPE OF RECOVERY?

Prediction is a very risky game.

V – Certainly not a V recovery where we will see prices bouncing back to 2007 values. Those predicting a V have moved the spike of the V further into the future.

U – Not even a U recovery where we see values bottom out for a while before recovering to previous values.

L – We feel it will be more like an L whereby the market will find its equilibrium level and then maintain that level for the predictable future. The difficulty at present is knowing whether we have dropped down the L far enough to travel along the bottom line?

THE FUTURE

Wetherell’s view is that prime residential property is still a sound long term investment class, a tangible asset class than can derive income and show capital growth. It is a hedge against inflation.

Following the old adage of “location, location, location” and the economics of supply and demand, then where better than Mayfair, geographically bounded and supply restricted through strict development planning regulation.

Add to this the renewed residential vitality of the Mayfair area through period office buildings reverting back to their former residential use and you have the perfect “location, location, location” opportunity.

The $ and the € are still strong so for overseas buyers the Mayfair market looks like good value and from the perspective of the seller then it is probably a goodtime to sell. Perhaps the equilibrium between buyers and sellers is just around the corner?

ADVICE TO CHANCELLOR FOR BUDGET
He should assist the property industry by scrapping HIPs and Stamp Duty.

HIPs (Home Information Packs – or seller’s report) should be abolished as they are a solution to a problem that never was. The market is now being strangled further by the requirement for a HIP to be in place by 1st day of marketing.

Stamp Duty should be either abolished completely or create a tax break holiday to encourage volume sales in the residential and commercial markets.

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