Timing the market or buy when you can ?

[eyespy]

Currently have ips in sydney and perth. Personally feel sydney is near it's peak, perth on the way down. Have had a look at Northern brisbane suburbs and though lots of people think brisbane is on the way up, I'm not convinced. I think last yr brisbane went up but this yr seems momentum is lacking.

So I have money to invest in another property ....do u think it's best to wait for the best time .....so when syd or perth drop and have more bargaining power or just invest when we can....which is now since we have the money ?

 

[Kinnon Bell]

Is there any reason you're restricting yourself to those 3 locations? Plenty of other places to invest where there's a rising market.

I'd look all over aust to find a place that would suit my requirements as there are always markets within markets.

 

[Peter_Tersteeg]

I think it's a combination of both. It's difficult to time the market to the absolute best outcome, but there are times when the market becomes very expensive and purchasing then could put you behind for a few years. On the other hand you don't always get to choose when you've got the ability to make another purchase. Waiting until the market conditions are better might been higher rates, lower affordability and you could miss out.

What you can choose is where you invest. I think there are definitely markets that are approaching their peak and should probably be avoided, but there are also locations where it still makes financial sense to buy. If you want to buy now but don't feel that Sydney has favorable purchasing conditions, figure out where it might be better to buy instead.

 

[eyespy]

Thanks for the feedback so far. I agree, I remember when I bought in the low of 2007, I had good bargaining power but banks wouldn't lend so favourably. Presently banks are lending more easily.

 

[C-mac]

I think there will always, at any given time, be a postcode or five 'somewhere' around Aus when the time is 'now' to buy. I don't believe in buying anywhere just because you are ready to go now. I actually believe in 'Timing the market AND time in the market', not just 'time in the market' as so many writers, experts and others proclaim.

You definitely need to accrue time in the market on any property hold (unless you are a flipper), but buying at the right time, per-chosen-market, for that market, is a big key to success.

 

[Big Will]

Time IN the market is what I live by.

Timing of the market is something no one can do and if you could you wouldn't be here

Easiest way to explain it, if you bought a house for double the price 50 years ago would you have made money now? Yes

However you would of made more money if you paid the going price 50 years ago and got two instead .

Myself personally I would look at Brisbane if I could afford to buy another one, decent growth, nice rental yields. I wouldn't buy rural qld though...

 

[eyespy]

I have been looking at brisbane....but not convinced on the price growth, yields are ok, not great though (not including logan) and vacancy rates still a bit high.

What are peoples experiences on the ground for brisbane inner 15km ?

 

[Brady]

I look at combination of both. Buying when I can but in the market that I believe is the best for growth. Sometimes don't need both if you're able to manufacture both via reno/divsion but if the timing is right it's a great multiplier.

 

[albanga]

Time IN the market is what I live by.

Timing of the market is something no one can do and if you could you wouldn't be here

Easiest way to explain it, if you bought a house for double the price 50 years ago would you have made money now? Yes

However you would of made more money if you paid the going price 50 years ago and got two instead .

Myself personally I would look at Brisbane if I could afford to buy another one, decent growth, nice rental yields. I wouldn't buy rural qld though...

I agree time in the market is ofcourse important but I totally disagree with your statement that you cannot time the market. This is what IMO makes a great investor and there are plenty of people who know how to do it. It takes a deeper understanding of economics and other factors which for most people (definitely including myself) that just do not understand it.

The prime example is the situation in America. A number of experts saw this opportunity and also understood what was going to happen to the Aussie dollar. Now if you combine our dollar tumbling with American property making a comeback you could understand how people who "timed" the market have profited and are set to considerably profit further from this.

 

[C-mac]

Totally agree Albanga; it is a mix of both that elevate great investors.

Can I also add this; it is about knowing when you are getting close to breaching your lending limits at any given time!

I say this because, let's be honest; most investors need to do all their 'buy and hold' investing from say age 25 (I.e. when you have your first wad of savings $$$ to buy your first cheapie), to only say 50/55 latest (when you need to have the portfolio done, to have a chance at a quality retirement lifestyle for the next 30 years+).

This only leaves a sobering 25-30 years to get your investing s**t sorted. Which actually isn't a lot of time when you consider most markets have a 7-10 year cycle (or longer; take Sydney which took 11 years since the 2003 peak, to reach peak again). This means that 'time in the market' alone is not enough because you will likely only get 3 x good bursts of growth throughout a 25 year holding period. In truth, you'll hold longer than this BUT the bulk of the equity growth needs to be done in 25 years!! Most of us will want to sell down half the portfolio anyways, to cash the other ones out and live off of the passive income.

In short, smart investors need to do both; time markets (to enable you to get ahead fast so the growth can compound from an earlier established base) and then spend time in the market too.

 

[Mindmaster]

Can you time the market? According to Herron Todd White, HELL YES!

Their February report indicates that Brisbane is a rising market and Hobart and Adelaide are at the start of recovery.

Finding out roughly where a city is on the property cycle is not rocket science. Finding the right market within a market is a little trickier.

 

[Aaron Sice]

NAB report out today puts Hobart in a much less favourable light. Still strugglng to understand the Tas market - seems to be a black art.

 

[C-mac]

With you on that Aaron! I know SS'ers who've done well there, and a friend who failed abysmally... Can't make sense of it!