When to buy

[yadeh]

Hi everyone

Although I have been warned before it is not a good time to buy an Investment property right now, I am wondering if you suggest a time frame in teh future to start buying?
I have already an approved investment loan from my lender and some deposit, but do not know if I should wait for next year or buy now. I appreciate any help with this.

 

[Punchy]

Before you buy do yourself a favour and read Olly's book "the day the market crashes". IT's written by a Kiwi property investor who has been in the market for quite a while and he suggests waiting 6 months after everyone starts screaming that they are losing money.

Some Bearish Forums for you to consider

www.cracker.com.au go to the housing part. the forum is full of trolls but housing is spared for some reason (boring? )

www.housepricecrash.co.uk - they have enjoyed a bubble like we have (and New Zealand, United States, Ireland, South Africa to name the main offenders.) and their arguments are transferable to our market.

My suggestion is that at the peak of a boom is not a good time to buy unless it's for your own home and there is a deep emotional attatchment. I am a property Bull just not in today's market.

 

[House_Keeper]

Nobody can give you an anwser without knowing the specific market you are targetting.

Watch your local market.

Are prices falling?

Can you buy a property cash-flow neutral?

Are rental prices increasing?

Is there a lot of construction going on?

How is the local economy?

 

[<KS>]

What housekeeper said.

Maybe in the Eastern States buying is not such a good idea at the moment - I cant really comment on that.

All I know is that if I had a spare million atm I would be comfortable in spending 80% of it in several good areas in WA as I believe local influences will see investors through even the steepest climb in interest rates.

<KS>

 

[Ausprop]

you are not a fortune teller nor are any of the other purported ball gazers... just use basic intuition and analysis based on todays judgement and if it looks like a good deal go for it.

 

[willair]

Yadeh,
its in your interest to find out what you can about the housing market
before you buy,dont wait until after you buy,because its too late to do anything
if you make a mistake and pay too much,try and find accurate information
on the suburbs or locations,the only 4 things that interest me in property are,
structural and physical condition of the property/end use.Price,Location.
good luck
willair.

 

[mitch]

My suggestion is that at the peak of a boom is not a good time to buy unless it's for your own home and there is a deep emotional attatchment. I am a property Bull just not in today's market.

l would have thought that the peak of the boom was late 2003 just before interest rates went up in Nov & Dec.

That would be around 17 months ago.

Regards Mitch

 

[jojomataketa]

Does falling prices in one country affect other countries

Hi,
I read elsewhere that property prices are falling in UK and Australia. In NewZealand the prices seem to be rising at the moment. I wonder if the former will influence the prices in NZ and start a decline here also, soon?
Does anyone have an insight into this or has there been a study done on such an issue?
Cheers
jojo

 

[House_Keeper]

In the last few years, there has been an increasing numbers of investors investing in New Zealand, particularly in search of cash flow positive properties.

I don't follow the New Zealand market closely, but I have read somewhere that the market is starting to plateau.

The NZ market has definitely been affected by the demand from Australian investors, so there is a link there.

 

[quiggles]

NZ has a lot of doom and gloom going at the moment. Property investors looking for CF+ are moving to one industry towns - risky, IMHO. CG players are starting to sit it out.

 

[MPmelb]

Yadeh, there should be no rush for you to buy right now. The market is not strong.

The Melbourne market is basically trending sideways to downwards in the past year, and now interest rates have risen, this will continue. There is likely to be another interest rate increase in the next few months, which will put many investors in duress, and they may be forced to sell.

Therefore, you will probably get yourself a good price if you wait for the Spring sales.

Having said that, if you find a suitable property and price that you like before that, you should buy. So you are in a strong position.

Either way, it is a buyers market now and probably for the next few years.

 

[Aceyducey]

I'd question whether New Zealand is still rising much.

Most of the serious investors I know in the NZ market have been lightening selectively for the last six-nine months.

(selling to the last wave of me-too investors)

Remember the hot potato game

Cheers,

Aceyducey

 

[Simon]

What is your investing strategy?

Contrarian, trader, buy and hold?

Buy in weakness sell in strength?

The Trend is your friend?

I think a smart investor can make money whatever the market is doing.

I know I am buying for my retirement so it is of no real consequence if I buy 5-10% over the market although I do try not to!

 

[Aceyducey]

What is your investing strategy?

Contrarian, trader, buy and hold?

Buy in weakness sell in strength?

The Trend is your friend?

I think a smart investor can make money whatever the market is doing.

The smart investor's strategy is:

Use the strategy that works at the time!

Focusing on a single strategy can work, but if it's only applicable part of the time it takes longer & more work.

And as financial situations change, different strategies are best.

Cheers,

Aceyducey

 

[Simon]

Perhaps I phrased it poorly.

I was sugesting that your holding timeframe would have a major impact on when you buy.

A trader holding for months might be very conscious of the cycle whilst someone holding for life might not be as concerned.

What strategy is working at this time Acey?

 

[yadeh]

good insights

Thanks Punchy and house Keeper for good and useful insights. I will try to read more before any hasty action!

 

[tubs]

Buy low and sell high

I think I have made this comment before, however buying low and selling high is a fundamental of making a profit. I know a number of people who have their houses on the market for months and they aren't moving. They are ripe for the picking. Whether it is technically the bottom of the cycle or not I dont know but there are bargains EVERYWHERE at the moment.

12-24 months ago when prices were higher and the bargains weren't there, everyone told you it was a great idea to buy property. Now the prices are lower and people say to stay away. I don't get it! I think this is the perfect time to buy, and if I had the disposable income right now, you wouldnt be able to stop me, because I'd be able to find bargains everywhere.

Having said that, the Oz market doesnt move at once. Places like Melb and Syd are probably starting to look like moving slowly up soon, where other places, such as SE Qld are still moving up from the previous cycle, so there are always parts of Australia that are going to be in a part of the cycle you want.

Tubs

 

[House_Keeper]

I think I have made this comment before, however buying low and selling high is a fundamental of making a profit. I know a number of people who have their houses on the market for months and they aren't moving. They are ripe for the picking. Whether it is technically the bottom of the cycle or not I dont know but there are bargains EVERYWHERE at the moment.

Tubs

Which area are you talking about?

 

[Punchy]

I've allways had a problem with the For Sale signs screaming "great investment" etc etc. If it was such a great investment (or cash cow as I saw one place marketed) why is it being sold?

 

[willair]

Punchy,
dont they call that ,people building skills,i think all the cash cows are dry..
good luck
willair..