PROPERTY CYCLES When To Buy

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For many years I’ve had a fascination with property cycles – when are the best times to buy in a property market and when are the times to avoid?

Let’s look at this as an example of an average Australian property cycle. Here’s what I’ve noticed over the past 20 years watching property cycles all around Australia…

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Transcription

G'day, team. I'm Phil Anderson from LifeCorp, the home of street smart property investors. Would you be interesting in knowing how to double, maybe even triple the performance of your investment properties? I'm guessing the answer is yes. Well, in this short four-part video series, I'm going to show you how street smart property investors are giving themselves the best chance to do exactly that.

Now, there's some really important key ingredients I wanna share with you. And one of the ones that I need to touch on first is property cycles. There's also some very new ways I've put this content together to highlight how effective, how effective and powerful this particular model can be. Let's first examine property cycles.

I've been watching property cycles for more than 20 years. I've had a fascination with property cycles all over Australia for that period of time, studying hundreds of cycles, and I've noticed one very, very common characteristic. Let me show you. When I watch property cycles, let's say this cycle averages about 10 years to roll through one complete cycle. What I've noticed in many of the Australian property cycles I've studied, they follow this characteristic where, for about 2/3 of a cycle, 2/3 of the whole cycle, nothing happens- very flat growth, no performance, and a real sluggish feel to the property market. And then, in about 1/3 of the property cycle, all of the growth appears. All of the capital growth cuts in, and all of the growth that you will achieve in a complete property cycle happens in about 1/3 of the time. Now, it doesn't take a rocket scientist to work out that this would be the ideal time to buy. Buy here, in what I call the 7 o'clock market.

Now, inside of the lunch money investing system, what I do is, we try to come up with data and information that help us clearly identify this stage of a property cycle. Unfortunately, many investors, many novice investors, are looking for proof. They're looking for growth, they're looking for evidence of growth in a market. So they buy quite high in the market. Most investors actually buy very close to the top of the growth curve of their local market, because that's where the evidence, because that's where the proof, is at its highest.

Now, interestingly, when you get to the end of this stage of the cycle, of course, another cycle starts. Once you hit the peak, you can quite often be entering another 2/3 phase where you're not gonna get any growth. You may even get a slight retraction. And then, obviously, some stage down the track, our property cycle's gonna roll around again, and more times than you can possibly imagine, follow this 2/3, 1/3 principle all over again.

Understanding property cycles is stage one in doubling and tripling the performance of your portfolio. It's stage one. We've got a few more we're gonna get through over the next few weeks, but thank you for joining me today. And remember: if you can't buy a property with your lunch money, don't buy it.

Comments

  1. Wow that was strange. I just wrote an extremely
    long comment but after I clicked submit my comment didn't appear.
    Grrrr... well I'm not writing all that over again. Anyhow,
    just wanted to say excellent blog!

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