“Before the game is afoot, thou still let'st slip” (Henry IV Part I: Act 1)
As we move toward the end of 2017, the outlook for the property market is uncertain. But what does this mean for buyers and sellers of property?
We have been through a period where we have witnessed clearance rates of more than 70 percent (high by historical standards). In this instance, the demand for property exceeded supply resulting in a period of prolonged price growth. Ongoing performance at this level is unsustainable. Clearance rates are most likely to revert to their mean of around 60%, indicating a shift in the property cycle. Such a shift opens the door for opportunity.
Similar to other investments the property market operates in a cycle. Picking when a property cycle will turn is notoriously difficult, nevertheless, buyers and sellers can still win. Two key approaches come to mind:
1) DEAL QUICKLY – When you do decide to deal, deal quickly. Buying and selling in the same market ensures you will not be caught out by cycle movement protecting your position and investment; and
2) PLAY FOR THE LONG TERM – The illiquid nature of real estate affords for long-term investment. Property is a long-term capital growth play (evidence indicates that property in Australia tends to double in value every seven to twelve years – dependent on interest rates, wages growth and location). Investing in the long-term lessens cyclical affectation.
With price growth and demand levels normalising there will be a variety of opportunities in the property market, especially as we move into 2018.
We have a significant track record in delivering the best results for our clients. If you are considering buying or selling and want to ensure you get the best result, call us today. I look forward to speaking with you.
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