Timing the Market

Every year I speak to buyers who tell me they’re going to wait.

Wait for more certainty.

Wait for prices to come back.

Wait until spring.

Wait until after the next interest rate decision.

Wait until after the election.

Wait until after winter.

The reasons change, but the logic is usually the same: surely there will be a better buying opportunity just around the corner.

Maybe.

But timing property markets is much harder than most people think.

The challenge isn’t simply predicting where prices will go next. It’s predicting what everyone else will do at the same time.

At the moment there is no shortage of commentary suggesting the market is softer than it was three, six, 12 months ago.

Sentiment has undoubtedly cooled. Buyers are more selective. Some properties are taking longer to sell. Negotiations are harder.

But what often gets overlooked is what happens on the supply side.

When confidence falls, sellers become cautious too.

People delay moving.

Families put renovation plans on hold.

Investors hold rather than sell.

Would-be vendors decide to wait for a stronger market.

As a result, the number of available properties often shrinks at the very time buyers are expecting more opportunities to appear.

It’s one of the great contradictions of real estate.

When buyers are waiting for better buying conditions, many sellers are waiting for better selling conditions.

The result is often less choice rather than more.

And choice matters.

Property isn’t a share portfolio where every unit is identical. You’re not buying “the market”. You’re buying a specific home, on a specific street, with a specific floorplan, orientation, land size and location.

The right property for your family may only come along once every few years.

That’s why I think many buyers focus too heavily on trying to buy at exactly the right point in the cycle and not enough on finding the right property.

The irony is that we only ever identify the bottom of a market in hindsight.

By the time everyone agrees conditions have improved, confidence has usually returned, competition has increased and the best opportunities have already passed.

We’ve seen this repeatedly over the years.

The buyers who look smartest aren’t necessarily the ones who perfectly timed the market.

They’re usually the ones who bought a quality property when it suited their circumstances and held it long enough for the market to do what markets tend to do over time.

As for what’s happening right now, we’ve a modest amount of new listings come to market over the past fortnight.

The next few weeks will likely be much quieter as we move into winter school holidays, which is fairly typical for this time of year.

However, many agents and vendors are already planning for an early spring campaign launch.

My expectation is that we’ll see a lift in quality stock from late July, with a decent selection of new listings hitting the market in early August.

Whether prices will hold, improve, or come off slightly remains to be seen.

What I do know is that buyers who spend all their energy trying to predict the market often miss opportunities sitting right in front of them.

And years later, they’re still talking about the house they should have bought…

Feature Property: 4 Chatsworth Road, Prahran