When it comes to buying a property, it’s been said that ‘timing is everything’. But while timing is certainly a big factor for many buyers, just how important is it?
Because buying a property is a long-term investment, timing may not be as crucial as you think. However, the property market clearly does have a predictable cycle, and understanding how it works and being able to read where it is currently at can help you maximise value.
So if you’re thinking of buying a property, but feel confused about when you should act, read on as we share our top tips on getting the timing right.
Tip #1: Understand the market cycles
The first thing to note about the property market cycle, is that overall, the trajectory trends up. This is evident in the significant long-term increase in the value of property over time. Having said that, within the trajectory the market does go through cycles, including the peak, decline, bottom, and recovery stages. One way to visualise this is to think of the hands of a clock, with 12 o’clock showing the peak, the hands moving down showing the decline, before they hit the bottom and head back up through the recovery stages.
Being able to identify the indicators for each stage can help you maximise value on your purchase. Things to look for include the increase or decline of property values, sales activity and vacancy rates. However, it’s a good idea not to allow this to influence you too heavily, as there are other key factors that contribute to the value and long-term success of your purchase.
Tip #2: Waiting for prices to bottom out may not be the best strategy
So you’ve identified the market has reached its peak—should you hold off from buying now because the prices are too high? Or, on the flip side, if it is now at the bottom, should you wait it out until more properties are available to increase your chances of snapping up a bargain? The answer depends on your situation.
Keep in mind that waiting for the market to trend up or down in the hope of saving money can actually end up costing you more over time. For example, if you are renting while waiting to buy, the money you are spending each week on rent could instead be going towards paying off your own property. In addition, the market is not always an accurate reflection of the true value in property. Generally banks are conservative with their estimations on property values, which can mean sales on overpriced homes may not go through due to a lack of available finance for prospective buyers. It’s wise to remember that you can find the perfect property at any time, regardless of where the market is currently placed.
Tip #3: Property is a long-term investment
As mentioned above, although the property market has its cycles, unlike shares or other investments, buying property is an investment strategy based on long-term sustained growth. To put it simply, buying the right home in the right location will always be a solid investment, no matter when you buy. And for most people, the sooner you buy, the sooner you can start enjoying the benefits, both to your lifestyle and your financial situation.
The perfect time to buy could be now
In reality, the perfect time to buy property depends more on your situation than the market—and for you this could be now! So if you are ready to buy, seek expert advice about your options and go for it.
With our Home Buyer Accelerator and Property Portfolio strategies, we can help you buy property now—even if you do not yet have a deposit to put down. This is possible by leveraging your super to create a deposit. To find out more, get in touch with our team on 07 3011 6260 today.
