The Australian property markets got the year off to a strong start with CoreLogic’s home value index rising by 1.1% in January. That takes annual growth to a staggering 22.4% – the highest rate since June 1989.
And the good news doesn’t stop there. Weekly rents hit record highs in every capital city bar Darwin as vacancy rates plummeted, according to Domain’s rental report for the December 2021 quarter.
Unsurprisingly, property investors are snapping up homes left, right and centre. The most recent Australian Bureau of Statistics’ lending data shows the total value of new investor loan commitments rose by 2.4% in December to a record high of $10.3 billion.
That’s the 14th consecutive month there’s been a lift, and takes investing lending up by a massive 73.9% year-on-year.
What’s more, investment home loan interest rates remain low – though there has been some speculation they’ll start rising.
But you might be scared you’ve ‘missed the boat’. After all, some commentators are saying the market has already peaked.
Timing the market vs time in the market
For new property investors, ‘buying low and selling high’ can seem like the best way of making money from real estate
There’s a big problem with market timing as a strategy, though.
It’s impossible to know when you’re right at the top or the bottom of the market cycle. To further complicate matters, there isn’t one Australian property market. Rather, there are dozens and dozens of real estate markets, each at a different stage of the cycle. So when one market is declining, another might be rising.
If you can’t pinpoint the ‘right’ time to buy property, what should you do instead?
Focus your efforts on finding the right property at the right price and then holding it for the long-term.
That’s because successful property investment is less about timing the market and more about time in the market.
Need proof?
Then consider this: the median price for Australian housing jumped from $160,000 in 1996 to $825,000 in 2020, according to the Real Estate Institute of Australia.
That’s the power of time in the market rather than timing the market.