There is an old piece of investment advice that specifies that you should buy when the market is down and sell when it is up. Whilst sound, even buying at the absolute peak of the market almost always works out in the short term. Consider the worst property market downturn this century. In Sydney following the Global Financial Crisis, the median house price dropped by 17% over a 14-month time period to hit a low in February 2009. Within eight months, they were back at the initial high and price growth continued. Even if you had bought in Sydney at the absolute peak of the post GFC market, in less than two years, you would have been back to where you were and then seen a 14% further increase. It isn’t different this time around. Prices will come off and then they will pick up again. If you think through the fundamentals of property demand, now is a particularly interesting time. On one hand, interest rates are rising rapidly so this restricts people’s ability to borrow. But on the other hand, the fundamentals of property are supporting the market - international migration is starting up again and a construction crisis is restricting new supply. More housing is needed and for now, this is showing up in sharp rises in rents. Sooner rather than later, it will flow through to prices. What we need to remember is that while the economic landscape is a consideration to some people’s decision making, when it comes to a fundamental necessity of life - such as knowing ‘where will I live?’, most people will continue to buy and sell property irrespective of what the market conditions are. Andrew Lonsdale Senior Sales Agent Ray White Canberra WHAT’S HAPPENING IN OUR MARKET?
RkJQdWJsaXNoZXIy MTI3ODI1