Why now is a good time to buy

It’s apparent from the front pages of metropolitan newspapers the time has arrived for the media to start “forecasting” real estate doom and gloom that’s set in for years to come.

In fact, if you believed the headlines of late, you’d likely want to hide under your bed until the property sky supposedly stopped falling.

Of course, property investment professionals know to look past such nonsense but unfortunately many buyers and sellers do not and will make bad decisions because of it.

They’re fearful because they’re giving credit to some media reports that, under scrutiny, are actually more make-believe than fact.

The truth of the matter is that there is nothing to fear from changing market conditions.

In reality, there is much to gain.

Market opportunity

One of the greatest investors of our time, Warren Buffett, believes in a philosophy of buying when others are fearful.

Now, that doesn’t mean he waits for the wider population to be shaking in their boots because of a sense of financial unease.

What it means is he invests counter-cyclically when competition is low, but the upside potential is high – a sound strategy for both shares and real estate as it turns out.

Successful investment involves securing property that ticks all of the fundamentals, but it is also about buying for the correct market price.

Now, that doesn’t mean buying property cheaply – that is never a good idea if it is an inferior property or one that is in a substandard location.

It means buying when there are fewer competitors to drive up the price and analyzing the data and demographics of the location to achieve the best outcome.

Savvy investors, of course, work with professionals to ensure they buy the best property in the best location for the right price, using the right data.

However, another benefit to using professionals, is that it helps to keep emotion – that is, your emotion – out of the equation.

And that is vitally important because it is human nature and human emotion that drives up prices.

How to make the most of the market

Firstly, there is no one market.

In fact, Australia is a land of many markets – both city and major regional – which are doing different things at the same time.

Just look at Sydney, for example, which many commentators seem to want us to believe is the only market in the nation.

While we know it is currently transitioning to the stabilisation phase of its price cycle – which provides opportunities for long-term investors – many pundits are trying to convince the masses that this is in some way unusual.

It is not.

All markets go through cycles that feature periods of slow and strong conditions with flat spots in-between.

The thing is, while Sydney’s market was slowing down, Melbourne’s was strengthening for a time, and so was Hobart’s in quite a major way.

On the other hand, Brisbane and Adelaide remained relatively steady, and Perth and Darwin were going backwards.

Remember, this was all happening at the same point in time.

Smart investors and their teams, of course, have undertaken significant research and they know when to enter a market – before anyone else – and when to move on to the next location – again, before anyone else.

That way, they’re able to secure solid properties for good prices before everyone else jumps on to “the next big thing”.

At the end of the day, successful property investment shouldn’t involve moments of emotional highs and lows.

A cool head should always prevail – regardless of what the media believes the market is doing.

That way, canny investors can make the most of soft market conditions, while the majority of buyers stay on the sidelines waiting for everyone else to do something before they jump on the bandwagon.

Review the PIPA (Property Investment Professionals of Australia) Chairman Peter Kouilizos presenting an Australian Property Market Update in Feb 19.

“Thankfully interest rates and unemployment are at historical lows, so there is no property crash on the horizon. This is a great time to buy if you have access to funds.”

What a video of the presentation here –  https://vimeo.com/319370164/fbba7f84ff

https://www.linkedin.com/pulse/why-now-good-time-buy-richard-crabb/

 

Richard Crabb | MD ASPIRE Network | PIPA Board Member
Author: Richard Crabb | MD ASPIRE Network | PIPA Board Member

QPIA® - Qualified Property Investment Advisor | Licensed Real Estate Agent - VIC: 082760L - SA: RLA 292544 - QLD: 3579879 |Diploma of Financial Planning |Active Property Investor | Board member of PIPA - Property Investment Professionals of Australia. Richard is the Founder and Managing Director of the ASPIRE Advisor Network. After an extensive career in corporate finance and through his personal investing experience, Richard identified the need to create a system and framework that supports ethical, independent property investment advisors who operate in the new property market. The ASPIRE Advisor Network now supports independent property advisors across Australia by providing their business engine and acquisition process, designed around concepts of future compliance in the brand new property sector. Richard together with the ASPIRE team has also developed a complete end to end software platform, which is leading the way to deliver property investment advice in the new property space. Our goal is to work with investors to implement their goals and objectives buying investment properties across Australia, utilising a structure and information-rich end to end experience.

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