Understanding your local property market
In today's market, it is common knowledge that the property market has cycles. It rises, falls and stabilises and then rises again.
Many investors try to pick their moment when to buy to maximise profits on the sale, but many do not realise in today's market that the cycles do not have as significant an impact as one thinks.
Many people have a different saying for different phases, but most agree there is a set 4:
The Value Stage – Flat prices, good for buying
The Growth phase: Prices rising
The Peak: The top of the market usually on the back-end of a quick twelve month rush of 20-25%. Followed by price moderation
The correction: People often refer to this as a crash, insiders refer to this as price moderation, then this is usually accompanied by stagnation.
Over recent history, these cycles tend to be between seven to ten years, connect with a buyers agent so you know what to expect.
It's a follow-on effect as stability breeds confidence, that in-turn breeds investment that leads to growth, with growth comes massive investment and quick growth leading to the peak, prices become too high, sellers can't sell and then follows the correction.
However, there are other factors at play.
With factors like:
Mortgage Lenders ability to lend
Unemployment rates in certain areas
Vacancy rates on investment properties
Local councils/State Government/Government
This may be broad, but each town or suburb can have a microcycle. A new commercial building can make a difference to one suburb while the next suburb sees no growth. Cities see very little growth compared to suburbs, plus natural disasters can affect employment and property in specific areas.
A whole range of factors from financial, personal, legal and emotional considerations are at play, but in reality when you cut through all of these the best time to buy is when the right property appears for you at the right price.