If you’ve been investing in property for a while, you no doubt know the golden rule: Investing for the medium to long term will deliver greater returns. What does this mean for property purchases? If you’re invested for eight to ten years, you’ll see most of the various real estate cycles. You don’t need to try to buy at the bottom of the market, and I’ll explain why.

Can you really time the property market for investing?

Many property investors, especially novice investors, will wait for a perceived fall in the market and then hope to swoop in to pick up a bargain. However, we know from long experience it’s notoriously difficult to identify the exact bottom of the market. If your strategy is predicated on buying at the lowest price, you could easily get caught out by a rapid market upswing, government policy that affects property and many other factors.

Hold property for the medium to long term: 8 to 10 years

The property market goes through cycles with dips and rises. Most cycles in Australia last from about seven to nine years, while the big-picture cycle can last up to 19 or 20 years, with three mini cycles during those years. We’ll see a period of intense activity as we saw in the latter half of 2020 and throughout 2021. When buyers and sellers are exhausted, we see a period when selling and buying return to normal (less hectic) levels.

How market cycles work for sellers and buyers

More people will put their homes on the market when prices are above average. As a property investor, you have more choices, and unless we see the extraordinary conditions we saw in late 2020 and throughout 2021, there is more room to negotiate on price.

When sellers perceive the market as down or flat, they’re less likely to want to sell their homes. However, there are at least 20 reasons people need to sell, no matter the timing. A new job interstate, a deceased estate that must be sold within a certain window for tax reasons, a move to a larger property to accommodate a growing family, a sea change or tree change; I could go on. These sellers need to sell so they can get on with their lives.

The decreased pool of homes on offer leads to perceived scarcity; that scarcity will ensure price stability and healthy competition among buyers.

Time in the market versus timing the market in the Barrington and Gloucester regions

Australian property prices (almost) always go up. Yes, during some cycles or when interest rates rise, we see a drop in the price of luxury properties in capital cities. However, interest rate rises don’t generally affect regional township properties to the same extent, although they have been shown to affect the prices of farms and lifestyle properties.

What seems expensive now will seem cheap in 10 years

We advise buyers to be flexible when it comes to price negotiation. Yes, it’s important to stick to your budget, but it’s also wise to assess a property carefully, even if it’s slightly over your budget. You don’t want to miss out on a growth property for the sake of a few thousand dollars (assuming you can stretch yourself without hardship).

Michael Yardney from Metropole states, “The Sydney housing market experienced an average compounding property price growth of 7.9% over the last 40 years”. While regional and rural property growth tends to fluctuate more, growth always creeps upwards.

Now more than ever, more people are seeking a more active lifestyle in country areas where they feel a greater sense of community. Our beautiful Gloucester and Barrington Tops region delivers.

Need advice on investing in Gloucester region property?

As a proud local, I’m here to guide you through the process of buying your ideal property. I specialise in lifestyle and rural and residential properties. I’ve bought properties myself and helped many investors over my career. So give me a call; I’m here to help.