Timing isn’t the be-all and end-all of investing. Still, in-depth analysis of the property cycle to identify the best time to buy will boost your chances of buying a property that will outperform the average.
In a depressed market, it’s easier to buy real estate at realistic prices because there is more supply than demand. There is also heightened market transparency, which helps buyers spot value. In a boom market, almost any price a vendor puts on a property results in a sale, so the chance that you’ll pay an inflated price is much greater.
But when you buy isn’t nearly as important as what you buy. It’s foolhardy to try to make money out of a flat market by buying a property at below-market value if it’s in a suburb or area in which prices are set to fall.
Expert views on the role timing plays in shaping investment returns vary greatly. Most investment advisers who focus on achieving high capital growth and favour buying inner-city properties over other types of real estate believe timing is not overly important.
For them, the crucial factor is that investors buy a well-located property, with strong growth potential, at a good price.
Timing counts for a lot more if you’re trying to pinpoint regional areas and outlying suburbs with future growth potential.