At the peak of the property market last year, sales volume was through the roof. For investors that got on the trend early, they have already seen gains in their equity, but for investors that were late to the party, they have had to stomach some losses in prices & equity.
Now, we have moved into a buyer's market where there are more listings than buyers. So, what does this mean for property investors?
A lot of investors have taken this opportunity to sit on their hands and take a 'wait and see' approach and with prices seemingly dropping all over the country, who could blame them? However, there is still a number of savvy investors picking up some extraordinary deals around the country.
The benefit of a buyer's market is that investors now hold a lot more negotiation power which creates the opportunity to get better deals. A lot of developers now are offering cash back's as an incentive to get deals across the line because their product isn't being sold otherwise.
Cash back's of $10,000 - $20,000 is not uncommon at the moment and they represent a good opportunity for investors to subsidise the cost of owning that investment property by using that cash to top up the mortgage payments each week.
As with the business cycle, it is widely accepted that property operates on a 10-year cycle. This means that naturally in that cycle you will see times of high activity and times of low activity. Although there is no silver bullet to determine exactly where we are at any given time in this cycle, we can make a judgment call based on current market conditions and hindsight.
In many instances, the best time to invest in any given market (including the property market) is during times of low market activity because you can often find deals that otherwise wouldn't have been attainable.
Perhaps the hardest thing for most investors is understanding this mindset shift away from 'following the herd' and understanding that the best time to buy is when others aren't.
Property investment is a long-term game and the majority of wealth is built through capital gains over a long period of time. However, finding deals that offer cash back or other incentives is really good because this allows a lot of investors to subsidise the cost of owning properties over the short term and put them in a position where they can afford to own the property for years to come and then realise the gains.
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