13 Nov Market fluctuations & You
The property market has, like any other industry, number of variables that will impact directly upon the values. market fluctuations are just part of being a property investor, but good property investors understand the reasons behind those fluctuations, and can make qualified decisions as a result.
In dealing with market fluctuations, the first thing to understand is the overarching reason that prices have gone up or down.
– Political or legislative changes?
– Planning approved for new infrastructure in the local area?
– External economic conditions impacting on property prices?
Once you have an understanding of the overall cause, it’s time to drill down and understand why this specific input has caused prices to fluctuate. Maybe there is a perception that the new motorway will bring with it increased road noise, and not just an easier drive to the CBD. Perhaps new permissions being granted for high-rise apartment blocks make potential homeowners feel that the suburb may change for the worse.
Now you can begin making some qualified assumptions, and the first part of this is considering if this fluctuation is short-term, long-term or permanent. A new motorway could be a permanent change, but if the perception with regards to road noise is wrong, there may be no impact on the medium term on property prices. In fact, this perception may present opportunities to purchase additional properties at a reduced rate.
Average investors lose sleep at night thinking about, “What happens if?” Good investors ask the same question, but then take the time to find out.
Market fluctuations can mean many things – including opportunities – but without thoughtful consideration and evaluation, it’s impossible to know.
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