Hedland & Newman

Investing in a slow market

September 9th, 2015 • No comments

It seems every property expert, blogger and real estate agent are talking about nationwide slowing of the property investment market. With banks tightening investment lending, higher rental vacancies in some areas and sluggish growth, the market seems to be making a polar shift from the previously enjoyed golden years of the last decade.

However slowing markets are not a bad thing and should be considered as opportunities rather than the doom and gloom approach taken by the media. One thing you can always rely on is that markets will rise and markets will fall. The timing is not always an exact science, however historical trends paint a consistent and somewhat reliable picture of what we can expect in the future.

Today, we consider the keys to help you adapt, thrive and take massive leaps forward in a down market.

1) Don’t Panic

One of Warren Buffets most famous lessons he shares is don’t panic when everyone else is. Investing is thinking with your head not your heart. Keeping the perspective that this is a long term game will help you overcome the short term downs.

In a down market there is allot more opportunities on offer and allot less competition vying for them.

2) Change your expectations

it can be hard to accept things are slowing and the unknown of when things will turn back around. The sooner to adjust your expectations of the current market and your returns, you can refocus on the opportunities this type of market can bring instead.

3) Don’t stick your head in the sand

Maximising your investing result in a slow market is best achieved when you have fully educated yourself to the market and trends. There are always hot spots and opportunities, you just need to know where to look. By researching smarter you can find and negotiate below market value property bargains and strong returns. Even with banks tightening their lending there are still options out there including government subsidiaries such as the National rental assistance scheme, distressed developer sales and flip opportunities.

4) Try a different strategy

Many investors in a slow market are trying a new property investment strategy. Experts have reported an increase of investors looking for “value add” opportunities, such as renovating, subdividing or even land with future rezoning potential.

Overall the property investment outlook in Australia long term will remain favourable. With our enviable conditions such as extremely low interest rates, low unemployment levels and growing populations, we remain one of the best countries in the world for real estate investing.  Focus on seeing the property cycle downswing as an opportunity to pick up a great deal and get ahead rather than a time to batten down the hatches and wait for the storm to pass.

 

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