Statistically speaking, if you take a moment to research past global disruptions, you will find that an increase in property prices follows soon after. In my personal view, I believe the key measures are still very much in place for the property market to bounce back strongly once the Coronavirus is contained thanks to ‘record low interest rates’, ‘slowdown in construction’, ‘government stimulus package assistance’ and ‘new job creation’ in thriving industries that have helped contain the unemployment blow.
“I strongly believe Home Sellers should refrain from selling now if they can afford to do so, history tells us that there is no better time to sell than later!” (As the below graph illustrates)
When a property market enters its corrective cycle/recession (as we are currently witnessing), inexperienced buyers tend to play the waiting game, looking to see if vendors will succumb and sell to them for a bargain price – sometimes they get lucky, most of the time they don’t. On the flip side, when the property market enters its growth phase, inexperienced buyers often overpay to secure something out of fear of missing out because it is what everyone else is doing.
“Savvy buyers pounce in market conditions such as COVID-19 – it’s the golden buying opportunity. They know they will emerge the winner on the other end, which is rarely the case in a boom.”
Savvy sellers and buyers both know that as a seller, you will never pick the peak of the ‘boom’, and as a buyer, you will never pick the peak of the ‘bottom’. Provided you have a stable job and income, you would be crazy not to look at investing at this point in time, as opposed to waiting for consumer confidence to re-emerge amongst home-sellers once this is all over.
Granted, there are a series of variables that come into play such as each individuals circumstances, and the fact you will often trade in the same market, meaning the your key measure should always be that of ‘changeover price’.
The point I am trying to make here is, don’t read too much into the media hype, because if that is what you base your purchasing and selling decisions on, you will almost certainly miss out on the best time to transact in Real Estate.
Never lose sight of the fact that you must take a long term view when investing in property, Real Estate can be a very dangerous marketplace for those that choose to adopt a short-term mindset.
Written By: Angelo Lambropoulos (Director, Lambros Realty)