The Bottom of the Market

The Bottom of the Market

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Boom, Bust, Downswing, Upturn

When to buy property and the timing in the market.

As I explained last week, a market on the downswing is heading towards the bottom.  The bottom of the market, or 6 o’clock on the property clock, is when prices are at their lowest, consumer confidence is virtually non-existent and the real estate market is at a standstill.

In 2010-11, it was safe to say that the Australian property market was hitting the bottom.  Housing prices were levelling out and in most cases, fell.  As an investor, this is usually a great time to buy as property is cheaper and there is greater chance to make returns as the market rises.

However, the one thing to remember about the bottom of the market, is that the quality of stock on the market can be hit and miss.  So it is important when buying property at the bottom of the market, that you do your homework on the property you want to invest in and the area to ensure it will make the returns you want in the future.

Today however, the news is better.  Real estate analysts have announced the market is on the rise with property prices slowly on the increase in many areas across Australia and consumer confidence back on the boil.

Maybe now is the right time to buy?

The Bottom of the Market

The Property Clock Australia: Downswing

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Property clock

Property Clock

Last week, I explained the property clock and the peak or 12 o’clock on the property clock.  Let’s look now at the downswing or declining market on the property clock.  Some property analysts also refer to this as 3 o’clock on the property clock.

But what does this mean?  A downswing is just that – property prices and sales are falling, building projects are being abandoned and rental yields are not competitive.  Is this a great time to buy?  Maybe not.  If the property market is in a downswing, then it needs to complete the cycle and bottom out before it moves upwards again.

One key to investing is to identify when a property market is falling and stake it out until you feel that the time is right to buy.  The downswing and bottom of the market is the time when bargains are easier to come by.

However, I do need to add a little warning here! I cannot emphasise enough the importance of having a property investment strategy and knowing what your goals are and the timeframes to achieve them.  Just because the market says the time is right to buy, doesn’t necessarily mean it is the right time for you!   Successful property investment is more about good decisions & management and sticking to your strategy.

But it does help to be able to read the time!!!

The Bottom of the Market

Keep watch on the Property Clock …

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How-To-Buy-Property4

The property clock shows buyers, sellers and investors where the property market is at any given time across Australia.   It is not a one size fits all proposition. All cities and towns will be at different points in the clock at any given time.

Understanding the Property Clock is important in trying to identify areas that have possibility of strong future growth.

The property clock is generally divided into 4 sections: peak, declining (or downswing), bottom, rising (or upswing).  Over the next month, I will take you through each section.

Peak

This is also known as 12 o’clock on the property clock.   Generally, this is the time when the market is at its highest, prices are increasing and there is an under-supply of stock on the market.

Is being at the peak, the best time for an investor to buy or sell?  Well, that depends on your individual circumstances and property strategy.

Knowing when to hold ‘em and knowing when to fold ‘em, is an important aspect of property investment.  By understanding the property clock for your particular market/s, you can add value to your portfolio.

Next week, I will look at the declining market.  Stay tuned…..