When you’re buying or selling property, timing the market right can mean saving tens of thousands of dollars. Get it wrong and you’ll be on the losing end of the deal. One way you can feel more confident about whether it’s a good time to buy or sell is by being clued up on the property clock.
Since the property market tends to run on a clearly defined cycle of either peaks or declines, it’s been likened to a ‘clock’. When the hand sits at 12 the market is at its peak, at 3 it’s in a downswing, when it reaches 6 the market has bottomed out. Then as the hand moves up towards the 9 it starts to recover and then goes into a peak again.
Image Source: Finder
The property clock acts as a tool to work out where a particular market or suburb is sitting on the clock and so the best time to buy or sell. When selling you want the hand to be at 12 and when buying you want it to be at 6. This is when you’ll ‘time the market right’. The trick is to figure out exactly where a particular market is sitting on the clock.
If you don’t feel confident about gauging this yourself, a number of market experts publish market predictions and property clock updates, including the Herron Todd White Residential Property Report. This is Australia’s largest independent property valuation and advisory group.
Let’s take a look at what’s hot and what’s not in Australia right now according to the latest Herron Todd White property report (Oct 2018).
Outlook by city
Currently at the bottom of the market for housing and approaching bottom of the market for units. Now’s the time for people to speak with their home loan brokers in Perth if they’re thinking about investing in localities that have potential for capital growth.
A declining market for residential and units, but a hotspot for renovators over the past several years due to high demand levels. People are preferring renovations and additions in expensive inner city areas rather than moving. Value gains are to be made in streets with a lot of build activity.
Starting to decline in both houses and units, eastern suburbs have shown a predilection for demolition and renovation projects (as opposed to moving house). Renovation projects are also increasing in inner and outer northern suburbs and inner west. Semi-detached townhouses are gaining popularity in inner at outer south east suburbs. Geelong remains one of the best performing property markets in the country, outperforming every major regional market.
A rising market for houses, but approaching the bottom of the market for units. Upgrading through renovation is increasingly prevalent by both homeowners and investors. Locations on the rise for include Annerley, Greenslopes and Holland Park in the southern strip which all have good services and great school zones.
A rising market for housing but at the bottom of market for units. The rising South Australian metropolitan property market has put a hold on some owner-occupiers looking to upsize. Some have found themselves priced out of their local market.
Approaching peak of market for housing and units, as older generations have moved out, and first home buyers have moved in, with renovations increasing.
A declining market for units, and bottom of market for housing. Values have bottomed out and activity remains in a holding pattern. The residential property market has been a hot spot for the mum-and-dad investors and first home buyers. Opportunities to enter this market are beginning to open up at much more affordable prices.
A rising market for housing and declining market for units. Construction of new dwellings in established areas has been very active over the last one to three years, owing heavily to the Mr Fluffy buyback scheme. This is a scheme by the ACT government to acquire, demolish and safely dispose of homes with loose-fill asbestos (Mr Fluffy) insulation.
The property market moves in cycles and knowing where the market is in that cycle can help your decision making process around property investment.
For example, at the moment housing prices in Australia’s biggest states are declining, with Sydney falling around 10% and Melbourne 8%. This is predicted to carry on for another two years as the hand moves off the 12 and heads towards the 6. In Perth, it’s a different story with housing prices already at the bottom of the market with values approaching recovery mode.
Got your eye on a certain location for property investment in WA or want to renovate using equity? Contact your mortgage broker to find out how you can source home loan finance for your project.