The market does move in cycles; there are times when property prices rise considerably quickly and there are times when prices don’t appear to move at all and even decrease. For investors and homeowners alike, it’s obviously better to buy a property when the market is at the bottom of a cycle and sell your property when it’s at the top.

If you’re looking to sell, ideally you want to sell at the top of the cycle so you know you’ll be getting top dollar.

But how do you know what phase the property cycle is in when one week the media is reporting property is hot and the following it’s not?

Property can be fickle and in our experience, it’s not a case of ‘if this is happening, the market will do that’; some properties exceed all expectations even when the market indicators are saying there’s a downturn.

When looking at market indicators, you may need to factor in a few other considerations before you decide whether the market is up or down:

Time a property takes to sell.

Many people believe if properties are taking a while to sell, it’s indicating a downturn in the market. For instance, if there’s an election coming up, many people hold back from buying or selling because of the uncertainty a new government may bring. If there is new legislation being introduced, this can spark a flurry of buying or selling depending on whom the legislation is affecting.

Achieved selling price

Looking at achieved selling prices only may not necessarily give you a true indication of what’s going on in the market; it’s better to look at the priced-achieved to price-asked ratio. Some free online tools track the advertised and sold price of properties and this can give you a better indication of whether property is going for the asking price or above.

Auction clearance rates

The media often quotes auction clearance rates to show the number of properties sold that weekend or month at auction. A low clearance rate, such as 50 percent, may indicate property isn’t selling. However, these results may not include properties sold prior to auction. Furthermore, you need to look at the types of property being sold (units may be selling better than houses in some areas), and look at local figures.

Number of ‘For Sale’ signs

Some think if there are a large number of ‘For Sale’ signs in an area, it might be because there aren’t enough buyers or the market is saturated and property is on the down. It may also be because there is a great big by-pass coming through the area and people are keen to move out!

We’ve been in the business for over 40 years, and the truth is, if the economy is buoyant, people have jobs and want to live in an area, if a property is priced right, it will sell and it will sell quickly regardless of whether it’s a buyers or sellers market.

Property does go up which is why it makes a great long term investment. And with interest rates still low, and some interest only mortgages still being offered, now is a great time to buy an investment property.

If you’d like to know more about what the market is doing, come in and have a chat! We’ve helped hundreds of people realise their dreams through property and we aim to make your property journey as smooth and stress-free as possible.

Come into the Cardiff office and meet our friendly team or give us a call on 02 4956 9777.

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