PROPERTY WILL BE THE FIRST OUT OF RECESSION…..BUT IT‘S DIFFERENT THIS TIME!

The property sector – whether commercial or residential – is usually the first to be hit by recession, and the first to emerge from that recession.

But this time it is different, because the recession is deeper and longer than any of us can remember, and because it coincides with a sea change in the world‘s news media.

While every journalist and pundit is now hungry for any signs of “green shoots” for the property market, there are some new factors at play.

In the residential sector, the UK‘s dire need for housing – and, especially, affordable housing – has seen the creation of the Homes & Communities Agency (HCA).  Backed by huge Government funding, this agency is bringing RSLs and private house-builders together to fill the home-building gap left by the collapse of the market.

That development has provided the means for private house-builders to retain their workforce and capitalise on their land-banks – while they wait for the private market to recover.

In the commercial sector, prices seem to have “bottomed-out”, and new interest is now coming in from investors.  While retail property probably has some further pain to absorb, the overall picture seems to be encouraging.

But this will not just be a case of returning to the previous boom-time, just as bankers are having to re-adjust to a “new normal”.

A key factor is the massive change taking place in the UK‘s news media – and a matching change in the views of their audience.

This tsunami is already changing how estate agents and home-buyers, operate: home-sale adverts in local newspapers or magazines are no longer as important as online listings and “virtual-viewings”.  So local newspapers are almost “giving away” adverts to estate agents, to sustain a reason for people to buy their newspapers.

That change will soon reach the commercial-property sector, which still believes that Estates Gazette and Property Week are paramount!

At a time when property firms have been scrutinising their costs, the number of paid-for subscriptions to those national magazines has been hit hard.

Meanwhile, the new wave of young property professionals are busy building online social networks through LinkedIn and Plaxo – giving them free and direct access to potential contacts for that letting, sale, or investment.

So you can be sure that there are web-entrepreneurs who have spotted the huge opportunity to provide low-cost online listings for commercial property, to mirror what has transformed the residential sector.  And their offering will be at a fraction of the cost of an advert in Estates Gazette.

But here‘s the rub:  everyone in the property sector is “conservative”:  it will be the brave and the visionary who recognise where things are heading – and do something about it.  Most will just assume that everything will return to the “status-quo”…….they are so wrong!