If you’re trying to time the market, be careful you’re not just being a warning to everyone else.
Let’s have a brief look at the market cycle to make sure we know what it’s best not to do. The property market has a clear history of moving in a cyclic pattern.
Generally speaking, the cycle usually follows a reasonably set pattern, but not always due to various factors. Also, various sectors of the market, e.g. residential, commercial, blue chip or lower demographic suburbs, can be in different sectors of the cycle at the same time. As such, before you can time the market you need to ascertain exactly where your goal property is in the market. Are you able to do that? Many “experts” can’t so would your crystal ball be any better than theirs? Personally, I subscribe to the theory that there is no bad time to buy a property. The sooner you buy, the sooner you start benefiting from the growth. This doesn’t mean that you just go out and buy any property without doing your due diligence. That’s important!
Actually, if you’re sitting there thinking that you’ll get in once the market hits bottom, guess what?
Brisbane Property Market
Looks like you blew it! According statistics of recent months, the Brisbane market has hit bottom and is starting on the way back to growth. Although we are still below the heights of Covid panic prices, indications over the May quarter, show us that Brisbane prices have risen 0.6%, this in addition to over $1 Billion in new lending hitting the market.
This means that if you haven’t purchased recently, you’ll now be in mix with aaaalll those other buyers who are also going to try to get in before prices go too high……again! At one of our inspections just last week, there were over 50 groups (100 people) who showed up, and once again we saw such competition drive three of the seven offers for that property up over the asking price.
Should you happen to purchase just prior to the bottom of the market, your property may drop a little in value, but where is it going to go after that? Yes, up! We don’t need to see a property growth chart to know that. Aussie property has been doing that ever since they invented property growth charts. Advertised listings currently being at very low levels will also add to a fairly crowded marketplace and what will that do? Correct! It will put upward pressure on prices. If you’re going hard saving a deposit, goodonya…..go hard! You’ll win in the end. If you’re sitting around watching the cycle…….good luck with that!
Remember this one?
Here it is here if you’d like a quick refresher on the best time to buy property.
Rather than try to time the market, which takes a lot of time, effort and research to stay on top of things, it’s very often the best method to adopt a longer term strategy. This way, you buy your property and leave it for the long term not only allowing it to grow in capital value, but also saving LOTS of money by not paying capital gains tax on sales profit, specifically for investors. You can also pay down the loan during this time increasing your equity in the property, which sets you up even better for your next purchase. This not only works for residential investment properties, but also owner occupied and most other types of property. As we mentioned in the link above, any investment, including property is buying time. Let the market do the work for you over that time. Sure, maybe make some improvements and renovations along the way if you like. That always improves growth and makes it a better place to bring up your family, but essentially you just sit back and get richer by the day. Make sure you teach this to your kids and grandkids. They’re the ones with the most time to get this plan in place.
We don’t recommend sitting around trying to time the market and being the warning for everyone else. There is no perfect time to buy property, so there’s no point waiting for it, trying to guess it, going cross eyed staring at your crystal ball or throwing darts at a calendar. The best plan is to buy your property as soon as possible…….if not sooner…..
If you’re not sure when, what, where, how or why to buy your property, feel free to call PPBA.
We’re happy to have an obligation free chat. We can help you.