As far as property cycles go, we’re entering a softening phase, but this doesn’t mean that property values will trend down forever or even for much longer.
Exactly how fast they’ll fall and how long they’ll stay there remains to be seen… but there’s another truth about this property cycle that it pays to keep in mind.
Property prices aren’t “crashing”. They’re simply following a predictable pattern of peaks and troughs that property cycles historically follow based on the push and pull of factors relating to buying ability, supply and demand.
Of course, that’s not stopping a number of news headlines from instilling anxiety in people, prompting them to wonder if they’ve paid too much or made a mistake, or they’re at risk of losing it all if the market falls…
These “doomsayers” are always vocal at this point of the cycle.
I can say this with certainty because I’ve heard it all before – many times. As a long-time property investor myself, I’ve transacted through many ups and downs in the property cycle and what I know for sure is that, at some stage, the market will turn again… and when it does, the opposite will happen and values will once again grow.
That’s why, in this current softening phase of the cycle, there are still plenty of active buyers out there. What makes them so different from the people who are shying away from the property market right now?
- They have a long-term vision.
The concept of investing is to grow wealth and staying focused on your bigger goals stops you from getting stuck in the short-term frenzy of ‘when is it the right time to buy’. There are always opportunities, so the best time is when you are ready and willing because the market will keep changing and the way to get in is to make the most of what you have right now.
To genuinely profit from property investing, you need to view it as a long-term strategy which means buying property and owning it for at least 7-10 years.
In a perfect world, depending on your strategy, you’d hold the property indefinitely. You just need to take a look at the prices people were paying for property 10 years ago, 15 years ago or 25 years ago to see that over time, the values grow.
- They are focused on their own pathway.
Investors who are taking advantage of the current market are making the most of what they have now.
By taking a long-term view of their property and wealth journey, it’s possible to see the many benefits of this current phase of the cycle, including:
- More available options: supply has started to return to the market so active buyers are starting to see more choices,
- Less competition: gone are the crazy days we saw last year, with dozens upon dozens of active buyers bidding for one property. For locations in demand, there still is competition but less competition means the speed of properties being bought and sold has started to ease,
- Negotiation power: lower demand and less competition gives you the upper hand advantage during negotiations, now this may or may not be directly linked to price, but it could be in the form of inclusions or terms and conditions of your purchase.
- They can see the opportunity.
Remember back in early 2020, when the pandemic first hit, and many media headlines declared that property prices would crash by up to 30?
As it turns out, they were wrong. Property values stalled for a short period, then the market boomed at a rate we hadn’t seen in decades.
You were considered brave for buying back then, but those who had the courage to take action gained the greatest rewards. And now, much like the buyer sentiment in 2020, it will be those who can see past the headlines and the doom and gloom predictions who will be best placed to profit from this market.
Before you go, here are a few more reasons why I believe investing in 2022 is still a great move for your overall wealth:
There is a small window to be able to take advantage of the current opportunity as it is – and I urge you to reach out with both hands and take it, because whilst everyone else is sitting and waiting, it’s a great time for you to leverage the present opportunity.
To find out why this year could be an ideal time to build wealth through property investment, or to learn more about the options available to you, contact our friendly team for an obligation-free chat today.