“It’s time in the market not timing the market”
Hi Guys, it’s Dean OBrien from OBrien Real Estate with another edition of the Property News for 2020 where real estate information is on the house.
Another exciting feature packed week has unfolded since the most significant Federal budget handed down since World War 2. Last week was our second week since private inspections re-commenced and we are seeing the flow effects in our numbers from the pent-up demand.
The number one question asked of an agent is, “is it a good time to buy or sell right now?” and that question is being asked even more right now. My answer to this question is always a yes and that is dependent on you doing both of those things, buying and selling at the same time. The result is generally relative because you are transacting in the same market in both directions. Of course, this question does not apply to all people because they could be either a first home buyer or a property investor wanting to only buy.
Rightly, everyone wants to buy at the lowest, some people will try and time the market, but the right property choice should determine the timing. It’s asset selection, not a timing selection, it’s time in the market not timing it and buying the wrong asset. If you are buying to again sell in 12 months to 18 months, that is a risky punt in any market, it’s my belief purchases in real estates should be made with the long term in mind. Currently, nationally homeownership cycles are 11.3 years for homes and 9.6 years for units. So that timeframe is a minimum to hold and that is a good place to start.
If you are buying with a long term view it doesn’t matter about timing the market it matters about asset selection. If you find the right home to buy remember that an opportunity to buy it again could be 10 years down the track. No one can pick the bottom or the top of the market for that matter. Use the GFC as an example, the market fell back and bounced back very quickly. You’ll notice the real estate market has never fallen back more 10% below the previous market rise since the 1985 and this again why time in the market beats timing the market. The same could be happening now as we have a great economic stimulus and low-interest rates. This gives people the confidence to buy and remember people can easily hold property with these interest rates so it’s important to buy the right property when it comes to the market and not have timing determine your asset selection nor determine your time in this life.
The news covering the market this week:
- First home buyers continue to surge in volume, with 12,302 first home buyers settling loans in August, equating to the highest monthly figure since October 2009 according to the Australian Bureau of Statistics.
- The value of new loan commitments for housing rose sharply in August, up by a record 12.6 per cent
- Aussies spend on average $1.7 billion per month on foreign purchases with their credit cards. In August foreign spending was just $664.3 million
- A year ago in August 2019, almost 55,000 students arrived in Australia to study. In August of this year, 50 students came to Australia.
- The weekly ANZ-Roy Morgan consumer confidence rating rose by 2.1 per cent – the most in 7 weeks – to a 19-week high.
Across OBrien Real Estate for the week we saw activity rise. 91 new listing to market, 110 properties under contract, and 85 sales. Overall sales across the state reported by realestate.com.au reveal 1021 private sales occurred up 227 from a fortnight ago.
Remember, if you’re considering selling and you launch your property onto the market with OBrien Real Estate you go into the draw to win 1 of 3 prizes with the major prize being a Volkswagen Polo valued at $26,770 including on-road costs.
That’s all for this week, I’m Dean OBrien and remember the information provided is of a general nature you should always seek independent legal, financial, taxation or other advice in relation to your unique circumstances.