Buying at the bottom sounds great, but educating yourself about the market is ever better

Buying at the bottom sounds great, but educating yourself about the market is ever better
Buying at the bottom sounds great, but educating yourself about the market is ever better

One of the hardest quests in property is to time your home sale at the market peak, to sit out, and to then buy back at the very bottom.

As we never really know what is around the corner, it is only some time after that the so-called peak and bottom can be gleaned.

Even then because there are so many separate cycles, it is not really possible to say there is just the one peak or bottom.

Buying back into a depressed real estate market, having determined it as a good time to buy, rather than evidence of ongoing doom, is not for everyone.

Waiting for the perfect bottom timing may see you never make the return acquisition and miss out altogether. 

And the best time to buy differs for everyone.

Of course, this is not going to stop some boasting of selling at the top of the Sydney market - around late 2016 early 2017 - and buying back at the bottom.

Good luck to them, because it is a tricky occurrence, thwart with risks at both ends of the deal.

Buying property is the biggest financial decision in most lifetimes, and there is stress involved, regardless of when or how often you buy.

Battling your own emotions could be hard, and then telling family and friends that you’re intent on pulling off a property masterstoke, could see pride and ego cloud your judgment.

For most property buyers, it is the norm to simply buy and sell in the same market which does offer some price comfort, especially for upsizers.

First home buyers get a greater shot at buying better too. 

Sydney is at a stage in its cycle where many are wondering if the property market is close to bottoming out, although the autumn market is marked by uncertainty, caution and a reluctance to commit.

The rate of the price fall is in decline, according to CoreLogic, and Sydney has also seen the strongest capital city auction clearance rate.

The overall market direction is set to be interest rate driven with other contributing factors including levels of consumer and business confidence, the state of the share market, stability in national and global economic conditions, along with government policy.

I'd suggest these are more unknown than usual.

The only way we will know the market has bottomed is in hindsight – and you'll have likely missed it by the time the data driven headlines advise when the bottom was.

Instead of trying to do what is almost impossible, the better strategy is to get educated about the markets.

Look out for minor increases in both buyer interest and transaction activity.

The tell-tale signs the market is about to turn a corner include well-priced properties starting to sell soon after their listing.

There will be multiple offers occurring on well-priced properties.

Some auction properties will be selling surprisingly above reserve.

A shortage of stock for sale across the suburb could be occurring with time on the market dropping.

Of course even if the market has bottomed there is no guarantee we will see any noteworthy increase in values any time soon.

The values might sit there for some years, as it did following the bottom after the 2003 boom.

But the successful property purchaser knows how to create wealth at any point in a cycle while others do poorly even in good times.

This article first appeared in The Daily Telegraph. 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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