How long is this downturn going to last?

I’m sorry.

I should rephrase the question…

How long are these opportunities going to last?

Because in the words of William Shakespeare,

“That is the question”.

So, what is the answer??

Well, I’ll get to that in a minute.?

RBA Cash Rate

There are multiple factors that influence how long we will be seeing these great buying opportunities for.

And a big one on everyone’s mind of late, is the RBA cash rate.?

Just this week, the RBA increased the cash rate for the sixth consecutive month.

That’s got a lot of people worried.

And when potential buyers worry, they tend to pause their buying decision to see how the market plays out.?

So with less buyers competing for the available stock, the market can stagnate.

However, what a lot of people tend to miss is the fact that THIS is a great time to buy!?

So as long as you can afford the higher rates, don’t hold back.

Because as I’ve detailed in previous newsletters and posts, smart investors buy when no one else is buying.

What opportunities?

One great opportunity of buying in a downturn, is being able to buy property at a discounted price from say 6 or 12 months ago.

If property prices are a bit lower, the average buyer can get more ‘bang for buck’.?

And look, we’ve seen the opportunities for ourselves.

Take this recent success story for example.

We managed to secure a great property in NSW for one of our clients.

And better yet, we got it for nearly $100k less than what the owners were looking to achieve at auction three months prior.?

Opportunities are plentiful in a market like this, you just need to have the right strategy and the right help.

The answer is…

So, what was the answer to the question from the start?

No one knows!

And anyone that tries to tell you the answer with any degree of certainty, is just guessing.?

However, what we DO know is this:

Historically, most downturns have been less severe and shorter than the upswing preceding it.

Which you can see in the below graph from REA Group.

Which bodes well for property owners if the historic precedent continues,

Because we’ve just seen a fantastic upswing over the last 24 months.

So taking into account that experts predict the cash rate to continue rising for the next 6-12 months,

You would also naturally expect the market to continue cooling during that time.?

But don’t get caught up in waiting things out.

The problem with waiting to “see what the market does”, is that by the time you realise things have picked up, it’ll be too late!

See, sentiment has had a little rebound, so perhaps some of the interest rate and inflation negativity has been priced in already.

Tim Lawless from Corelogic recently said the same:

“It’s possible we have seen the initial shock of a rapid rise in interest rates pass through the market and most borrowers and prospective home buyers have now ‘priced in’ further rate hikes”

Once everyone else is comfortable with buying again, the market has already heated up and you’ve likely missed out on the initial market pulse in values.

If you have the capacity to buy within the next 6 months, then go right ahead.

In a few years time, you’ll be glad you did.

If you’re uncertain about what to do, you’re not alone.?

Luckily, this is where 1Group excels!?

If you’d like a hand on creating or tweaking your property strategy to set yourself up for success, you can book a strategy call with me here.