Thursday, 8 September 2016

Buying Property, Time To Buy Or Wait?

Warren buffet once said, ‘Buy when people are selling, and sell when people are buying.’ As an investor it is important to know where the market is within the cycle to ensure you secure your property at the right point of a cycle to maximise your returns. Below, two news articles making reference to Manhattan real estate prices over a space of two years.  



Understanding where we are in a cycle could help you make a decision about whether to buy or sell property, depending on whether you think values are likely to grow, stagnate, or decline. 

Boom Phase:

-       Properties often sell for more than their asking price.
-       Buyers out number sellers.
-       Generally the shortest of all the cycles.
-       Real estate prices are going up.
-       Buyers are stretching their finances to purchase property.
-       Not a great time to purchase real estate

Transition Phase (Boom to downturn)

-       Not a wise time to buy real estate.  
-       Outer suburb real estate prices start declining.
-       Auction clearance rates are declining.

Downturn Phase

-       Oversupply of property’s on the market.
-       Properties sell for less than their asking price.
-       Real estate prices are going up.
-       Sellers out number buyers.
-       Increase in bank foreclosures.
-       Great buying opportunities.

Recovery Phase

-       Transition from a slump to a boom.
-       A great time to purchase real estate.
-       Prime real estate pockets start increasing in price (inner city). 

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