In the media, we hear a lot of figures getting thrown around and plenty of big generalisations.
Property prices are rising or falling, houses are outperforming units, regional is better than the city or vice versa…
While there might be some truths to any of these broad-based generalisations, it’s far more important to look at the micro factors that are impacting various markets.
One of the key components of my investment philosophy is buying the right asset in the right location. I want to make sure that I’m not falling for the trap of chasing a ‘hot’ property market or the latest trend.
Before purchasing any asset, I want to see that it has not just shown growth over the past two years – I want to see one that has grown consistently over the past two decades or more.
When people start following short-term trends, it’s easy to get into trouble.
Just look at what happened during the last property boom in the mining towns. Investors were chasing quick returns and sky high yields, only to be left holding the bag when things went bad.
Similarly, we’ve seen these sorts of stories play out in other property markets. I think about units on the Sunshine Coast in a similar vein. While the area has performed well, if you had purchased the wrong asset in that area, such as a unit, it’s likely seen no value growth over many decades.
Now that the super hot seller’s market that we’ve been experiencing over the past few years is winding down, you want to make sure your portfolio is filled with high-quality assets that are the right fit for the location.
These types of assets will be able to weather the storm of higher interest rates and will still see steady owner-occupier demand which is the cornerstone of genuine capital growth.
That’s why I continue to invest in only blue-chip locations and buy assets that are in demand for the owner-occupier in that area.
When I focus on that, I am not chasing the latest trend or getting caught up in a hot market. I’m also confident that the assets in my portfolio will hold up well when conditions ease and then outperform when they are strong.
Now is the time to start identifying assets that are able to perform well across different market conditions. With the help of the best buyers agent in Melbourne, you can ensure you’re investing in the right property.
Use these opportunities to buy when there is less competition and when you can negotiate hard. Don’t fall into the trap of chasing the market, based on media hype only to get stuck with a second rate asset that could very well see no growth for decades.
