There’s a lot of negative stuff being said about the property market at the moment.
But, while prices cool across the nation, opportunities to buy become even greater.
And so, after several years of surging prices, we are now entering into a buyers’ market.
Will it last for long?
According to Nathan, the current slowdown is nothing more than a short-term glitch.
Throughout the 15 years of his investing career, he has seen several of these periods where the market slows before picking up speed once more.
This kind of market is his favourite, because it means he can pick up plenty of bargains.
The mistake most people make.
People tend to freak out when the market slows after a long period of growth. They buy when prices are high under the misapprehension that property will keep going up forever.
But, property doesn’t always go up – it operates in cycles.
When prices start to drop, the unknowing public start to panic because they think the market will crash.
Successful investors buy when the price is right.
More savvy individuals, on the other hand, wait for the right time in the market cycle to buy. They buy when prices are low and starting an upward climb.
The thing about the market at the moment is that demand is still there – but less people can get finance thanks to APRA’s even tighter regulation.
The result means a gradual slowdown in property prices rather than a severe crash.
Once things have stabilised again, it is most likely that property prices will begin another upwards climb.
Nathan’s favourite time to buy.
This sort of market is Nathan’s favourite time to buy. He says, thanks to less competition between buyers, he has more power to negotiate a low purchase price.
A few years ago, he found himself losing properties because, by the time he had signed the contract, the property had gone to a higher bidder.
Now, he is able to once more “smash agents over the head” … on price, that is.
What does Nathan see happening?
Just like other periods of less growth, Nathan believes some properties will go up and others won’t.
It is important to buy properties that have the fundamentals in place.
Buying in a good growth area is essential in order to avoid negative capital.
You should also buy properties that have a neutral cash flow, and avoid mining towns or other areas dependent on one type of industry.
Strike while the iron is hot (and the market is cool).
The best time to take action is when the power to negotiate is in your hands – and not in those of the selling agent.
Make sure you are finance ready and know your numbers, so you can make the most of this slow down while it lasts.
Have you seen prices drop in your home suburb? Please share your experiences in the comments section below.
How are you going to take advantage of this buyers’ market?
You can do one of two things: You can sit there and make excuses about how it isn’t the right time or you can take action and kick start your property investment journey.
We always say, “the best time to start investing is yesterday.”
If you want to take advantage of what is an exciting time for property investors, and you need help devising a strategy, speak to our customer care team today.