The recent weeks have started seeing the mood of the country dwindle as national property prices have started to plummet.
The rising interest rates have caused a significant drop in the sales and rise in inventory as the home buyers have been taking a more cautious approach.
The housing market has only seen a small fall in values while the sentiments being low, many people are waiting for the rise in price. However, this could prove to be the wrong move.
Here are 3 reasons why investing in property might turn lucrative for you.
Location matters
It is common amongst property investors, that the Australian property market is not one large bubble. There are tens of thousands of smaller property markets performing quite differently from one another. Surprisingly, it is seen that different areas of the same suburb perform quite uniquely, where the demand on one side of the street could be higher than the one facing it.
Spanning the entire country, some areas are going to see prices weakening, but it is unlikely to be the case for all of them. Certainly, there are always going to be locations that will have a supply and demand imbalance that will see prices ascending, regardless of the overall market conditions.
It is seen, locations that perform well in any stage of the cycle are those within good school catchments and suburbs that have the capacity to subdivide or develop. Alongside the suburbs, the areas that are currently seeing infrastructure development, upscale amenities and lucrative job creation are also a hot pick for housing investors.
These are the fundamental factors that lead buyers to choose specific areas. However, if the supply is low, then that will continue to put upthrust on prices.
Market timing
As experts have observed through boom and bust cycles in property prices, the values go up way more than they fall during each cycle.
The new data released by Domain suggests that on an average, the boom run tends to be greater, seeing property prices rise by 32.7% from the point of price trough to peak, while spanning 2.75 years.
However, during the bust cycle on an average, the property prices decline by 3.0% from the point of price peak to trough, spanning 0.75 years.
The studies suggest that it is way more imperative to spend time in the market than to time the bottom and top of the cycles. It is found that some buyers are awaiting the prices to return to where they were prior to 2020, as data suggests it is unlikely to happen.
Be an opportunist
The last 12 months has given the active property investors a hard run as virtually all homes were selling rapidly with multiple offers. Thus, it has proven that the market is extremely tight in terms of overall supply.
An investor needs to work quickly with very little room to negotiate as this is a difficult environment to operate in.
Currently, the homebuyers are ready to take on the driver’s seat as the listings are starting to increase once again. For long term investors this can turn out to be a great opportunity where they can find higher quality assets when there is less competition, while paying a lot less for it than they would if they were competing with multiple other buyers.
It won’t be late before the media headline turns around buyers will flock in to buy properties making the competition stiffer.