When to invest in the property market
Investing in property is an exciting step, but you may be uncertain about the “right” time to head into the market. If that sounds like you, rest assured, the time to invest is when you’re ready.
Understanding property markets
Timing can play a role in your decision to buy an investment property – though perhaps not in the way you expect.
That’s because there are two important aspects of the property market that all investors need to be aware of.
The first is that while property prices can (and do) fluctuate year-on-year, the long term price trend is upwards. When deciding your property investment strategy this is something you might need to consider.
In addition, over time property can offer a steady and stable investment return, plus you may also gain generous tax benefits.
The second factor to be aware of, is that in a nation as large as Australia, property market conditions vary widely.
When one area is experiencing rising values, another may be seeing cooler market conditions. What matters is that you get to know the location you are planning to invest in by doing plenty of research.
Investing in property during a market downturn
A market downturn is easy to recognise. Not only can home values fall, it may also take longer to sell a property. Auction clearance rates trend lower, and sellers may be more open to negotiating on price.
This can make a downturn the ideal time to consider investing in property. The problem is that no one – not even the experts, can say exactly when a property market has reached the low point of its price cycle.
Investing in a property boom
Boom conditions see property values rise – and this is when the value of keeping an eye on the trends in the market pays off because there can still be times of the year when a higher than normal volume of properties is listed for sale which potentially could give you a buyer’s edge.
Quite often, warmer times of the year will have a larger supply of properties on the market, which possibly could increase your chances of finding your perfect property. However, keep in mind, the popularity of the houses may make them a little bit more expensive.
Invest when you’re ready
The main point is that the property market, like all investment markets, moves in cycles. There is no “right” or “wrong” time to invest.
The trick is to research and see what is on offer, seek professional advice if you need an additional opinion, and determine if you’re buying at the right time – suiting your personal needs and circumstances.
Navigate to the next article
Ready to keep learning?
Almost 30 years of home loan expertise, delivered to you monthly
Take the next step to buying your first home
- Chapter One : Things to consider before investing in property
- Chapter Two : Determining where to invest
- Chapter Three : Investment properties by dwelling types
- Chapter Four : Finance for your investment property purchase
- Chapter Five : How to invest in property
- Chapter Six : Adding value to your investment property
- Chapter Seven : Positive and negative gearing
- Chapter Eight : Getting your loan
- Chapter Nine : Selling your investment property