It’s been a stellar 12 months for property prices across the country with Sydney property values increasing by 25.5 per cent based on the latest data from CoreLogic.
After those types of price rises, many people might be sitting back and asking themselves whether they should be entering the market at the moment or if they should potentially wait for the market to start to cool down.
There are quite a few factors to look at with this assumption and I want to start with the most obvious one first which is that people are predicting that property prices will start falling. If we look at the history of property prices across the entire country we can see that the biggest fall we’ve had in recent times is by around 15 per cent.
That’s taking into consideration all ranges of properties at different price points and in different locations. In more desirable locations such as the places Sydney buyers agency operate including the Eastern Suburbs, Northern Beaches and the beachside areas of Newcastle, the types of falls these locations could see are not going to be as severe as the broader market.
In these types of locations, they aren’t typically going to be featuring heavy falls like you might see in a mining town that goes bust. Rather you’re simply going to get fewer buyers interested in a property. However, there will always be buyers for high-quality properties in good locations.
As a buyers agency we know there are things that make properties more appealing than others. Features like quiet streets, north facing, parking etc appeal to owner-occupiers and if you have a property that checks these boxes you’re always going to have a steady stream of buyers lining up to buy your property regardless of the overall market.
The second factor that we need to consider is that by sitting and waiting to buy you’re effectively saying that you can time and predict the property market.
We only have to look back to the start of COVID and see the myriad of expert calls that were wildly wrong (see 40 per cent falls in house prices) to know that it is really difficult to both time and predict the property market.
You’re far better off getting into the market and buying an A grade property when you can afford to rather than trying to buy into a small window of opportunity that may or may not happen.
For example, let’s say you decide to sit on your hands waiting for a 15 per cent fall in property prices, but instead of falling prices, values keep on climbing and finish the year 10 per cent higher – which they are currently on track to do in many areas of Sydney.
All you’ve done is put yourself further away from your goals and even if prices then fall 15 per cent from those levels, you’re still back at square one anyhow.
That’s why having the right strategy to buy far outweighs trying to predict what the market may or may not do in the next 12 months.
Remember, the property market is not one huge market where prices in every suburb move in sync with one another. There are always opportunities to buy if you’ve got the right strategy and can execute it effectively.
Waiting for the market to cool down is not really a strategy. Buying high-quality assets in premium locations that have a history of long term growth through different market cycles is a far superior approach than trying to pick the top or bottom of a given property cycle.