The best of times, the worst of times

The best of times, the worst of times
By Scott Bentley


The best of times, the worst of times

Knowing when to buy and sell can make a substantial difference to your bottom line.


It is often said in property cycles that you make your money when you buy - rather than when you sell. It’s just one way in which timing plays its part in the success or otherwise of buying or selling real estate.

Given a choice, deciding when to buy or sell can have significant financial consequences for you in the short and long term.

For example, selling when everyone else is selling means there is less competition for your property (and a likely lower selling price) as buyers have a greater choice from which to choose their next home.

Similarly, bucking the trend and buying early in a cycle allows you the opportunity to sit back and watch your property’s value increase. And while it’s true the capital appreciation isn’t always immediately evident when you buy, at a later stage the long-term gains can be immensely satisfying when the time comes to sell down the track.

Of course, selling and buying in the same market tends to level things out. But knowing exactly when the time is right to sell - beyond the standard sign of buying when the mortgage repayments are cheaper than it is to rent - can be problematic.

They say that information is power. 

 
July sales in Marlborough (excluding Kaikoura)  
Houses20192018
Number of sales 8474
Median sales price$433,818$456,750
Days on the market3850
Sections 118
Median sale price $230,000$215,000

        
       
        
        


 

Source data: Real Estate Institute of New Zealand


This is where obtaining quality advice is crucial. Just as you remain loyal to your family doctor, a similar philosophy should apply to your real estate agent. Rest assured, the show of faith will be reciprocated many times over in terms of expertise and little-known market insights.

Your computer can also be an invaluable source of information. The beauty of buying in the internet age is that you don’t have to pound the streets every weekend to know when to act. For example, there is a plethora of data from agencies such as www.interest.co.nz that enable you to track sales results.

Another popular concept is the property clock, which highlights when it is best to sell and when to hold based on the recognised property stages, such as the peak of the market (or boom around midnight on the clock) when demand outstrips supply.

The property clock is a rough guide of market performance used by investors and is updated by various property advisory services firms to highlight the optimal occasion to act around New Zealand.

By establishing where a particular town or suburb sits on the clock, you can time your selling and buying decisions for optimal returns.

Using one method or a combination of sources can be a handy guide. By sticking to time-honoured principles, the equation to a brighter future becomes so much clearer.

All good things do come to those who wait, but they also come to those who pick their moment carefully.