The property market cycle clock, commonly referred to as the ‘property clock’ follows a predictable pattern as sure as night follows day. This pattern reveals three distinct phases being ‘boom’ followed by ‘slump’ followed by ‘recovery’ before the next ‘boom’ commences etc.
People that are looking to purchase property should understand how the property clock works. The purpose of the property clock is to indicate with some regularity and dependability, what times and regions are currently favorable for investing in property during the property cycle.
Andrew Winter in his presentation in Cairns used the property clock as the centrepiece of his seminar. He told the audience of 600 that the property market cycle clock is a wonderful way of illustrating how the housing market works, and it’s pretty predictable. Andrew had the following to say about where Cairns is positioned in the current clock cycle:
NOTE: The Property clock has been updated to March 2019. Details added at the end of this post.
12 o’clock is the peak of the market, and that’s when you want to sell. What you don’t want to do is buy. However what many people usually do is buy at 12 o’clock because they think the market is on fire and it’s a great time.
Cairns is sitting in a very good position right now, between 7-8 o’clock. This is the start of recovery. It’s a nice place to be because there’s still a long way to go to 12 o’clock, but it’s all a positive way, in theory, according to the property clock.
Something interesting about the property clock is one predictable element – the 6-12 o’clock period i.e. the improving side, is always considerably quicker than the 12-6 o’clock side. Andrew goes into detail why this is the case in his presentation, however the unpredictable element of it is the time in which it takes.
The other crucial point is between 5-7 o’clock, and that is a magic time, because during this time everyone is thinking that it’s a hopeless market and nothing’s selling unless you give it away. Then suddenly we get to 6 but lots of people don’t know, then the very astute think ‘hang on, things are improving, I might just grab a bargain’, and the very clever who buy come in just around that 5-6 o’clock point and make good money.
Should you be buying? This is the very early stages of the market recovery. Speaking to local agents some put it at 6-7 o’clock and some at 7-8 o’clock. Right now you might still just have the slight edge on sellers, because it’s a newly recovering market.
Successful property buying/investing involves the right strategy, right market, and right time. Many investors spend the majority of their efforts trying to identify the bottom of the clock. So in light of the above, I’ll let you draw your own conclusions on whether now is a good time to buy in Cairns. For me, I think I need to go talk with a good mortgage broker to get myself ‘buyer ready’! 😉
Update March 2019
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