Featured Releases:
:
Newsletters:
Archive Press Releases:
Find an article
Browse articles:
- 2010
- 2011
- 2012
Is it the Right Time to Buy or Sell?
Posted: 14th December 2010
Is there ever a “right time” to buy or sell a property?....Well let us take a closer look.
The simple logic of “buy” when the market is down and “sell” when the market is up does not fit well when dealing with your primary residence (your family home). The reason is simple to understand – property values are cyclical so what is the point of waiting to buy your primary residence when the market is down as you will be experiencing many “down” markets in the years ahead. Similarly “selling” when the market is “up” suggests that you will also have to buy a replacement primary residence at the same time (i.e. in the “up” cycle). Sure the logic works when you deal and invest in commercial properties, but not so for primary residences.
A more important aspect of home ownership is to be able to get onto the property ladder as soon as you can. The sooner you are a homeowner, the sooner you will be able to enjoy the benefits of the capital gain in the years ahead. The operative words here are “years ahead”. Property is a long term investment (5 to 10 year cycles) and whichever statistical data you read, the long term prospect for property, within many “down” or “up” cycles, is always upwards. The two main reasons for this which no economist can ever argue otherwise is shortage of convenient, well located land and construction cost inflation. These two reasons alone ensure that a home will always grow in value in the long term.
Another way of looking at it is that when you sell when the market is down (suggesting that you achieve a lower price) you would then be buying in a market that is also down which means the net effect is that there is no disadvantage. The same applies when the market is up – realising a higher selling price when the market is up means that you will be replacing the property with another in the higher market and therefore paying a higher price, so, the advantage is negated.
So, the decision to buy or sell depends on your existing financial situation and you existing affordability status but one thing is for sure, the sooner you get onto the property ladder with specific reference to you primary residence, the wealthier you will become in the years ahead.
The simple logic of “buy” when the market is down and “sell” when the market is up does not fit well when dealing with your primary residence (your family home). The reason is simple to understand – property values are cyclical so what is the point of waiting to buy your primary residence when the market is down as you will be experiencing many “down” markets in the years ahead. Similarly “selling” when the market is “up” suggests that you will also have to buy a replacement primary residence at the same time (i.e. in the “up” cycle). Sure the logic works when you deal and invest in commercial properties, but not so for primary residences.
A more important aspect of home ownership is to be able to get onto the property ladder as soon as you can. The sooner you are a homeowner, the sooner you will be able to enjoy the benefits of the capital gain in the years ahead. The operative words here are “years ahead”. Property is a long term investment (5 to 10 year cycles) and whichever statistical data you read, the long term prospect for property, within many “down” or “up” cycles, is always upwards. The two main reasons for this which no economist can ever argue otherwise is shortage of convenient, well located land and construction cost inflation. These two reasons alone ensure that a home will always grow in value in the long term.
Another way of looking at it is that when you sell when the market is down (suggesting that you achieve a lower price) you would then be buying in a market that is also down which means the net effect is that there is no disadvantage. The same applies when the market is up – realising a higher selling price when the market is up means that you will be replacing the property with another in the higher market and therefore paying a higher price, so, the advantage is negated.
So, the decision to buy or sell depends on your existing financial situation and you existing affordability status but one thing is for sure, the sooner you get onto the property ladder with specific reference to you primary residence, the wealthier you will become in the years ahead.
Posted by: Century 21
