A new trend seems to be emerging in certain property circles. Several times in the past six months I have seen evidence of hardened investors who have always pursued an offplan investment strategy considering a radical change.

The profitable strategy of the past decade is fairly simple on paper – find a reputable builder, reserve an apartment in a great location which will be built in 2-4 years time, negotiate preferable payment terms and wait for capital appreciate during the construction stage. Definitely not as easy as it sounds, but hundreds of thousands of people have been doing it successfully.

Times are changing though, and these same hardened buyers are now pursuing a new strategy with equal vigor – instead of offplan apartments or condo hotels in emerging markets, they are snapping up completely finished properties in developed markets at discounted prices.

Why? The credit crunch. Developers are struggling to sell excess stock, which means they are under pressure from the banks that financed them. This forces them to drop prices dramatically to stimulate supply and boy are they doing it. I’ve seen prime urban properties in very wealthy cities selling cheaper than an offplan resort in an area with a fraction of the income per capita.

The property section in Torcana.com has plenty of examples for any who have time to look through them.

Kind Regards

Colin Murphy

Torcana Ltd

Tags: distressed property, distressed property developers, Overvalued Irish land, profitable strategies, Torcana

This entry was posted on Thursday, June 18th, 2009 at 5:46 pm and is filed under General Opinion. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.