Highlights:
- Daniel Spencer showed a graph of Australia's capital city house prices since 1881, emphasizing the market's history.
- He mentioned that in 1946, the market bounced back after World War II.
- Spencer advised waiting if planning to flip a property in the short term, but for long-term (7-10 years) investments, market fluctuations are less relevant.
- He highlighted that Australian property prices in Melbourne doubled every seven years since 1946.
- Spencer encouraged buyers not to try to time the market, emphasizing the importance of considering personal circumstances and investing in high-quality properties. He also compared the stability of real estate to shares, pointing out the lower volatility of the property market.
Renowned real estate expert Daniel Spencer recently shared valuable insights on the current state of the Australian property market at OpenLot's Industry Training Event. Spencer, known for his expertise in analysing market trends, highlighted the historical performance of house prices in Australia since 1881. He emphasised the significance of long-term investment and advised potential buyers not to wait for market drops if their plan involves holding the property for seven to ten years.
Using a graph showcasing the growth of property prices since 1946, Spencer demonstrated that Melbourne's property prices have doubled every seven years on average. He debunked the notion that property prices might significantly drop, explaining that while minor fluctuations can occur, the Australian market has consistently shown a tendency to rebound at a faster rate than the decline. Spencer further explained how individuals borrow against the equity of their homes to invest in businesses, leading to the growth of various enterprises, particularly in the wake of the pandemic.
Spencer emphasised the importance of seizing opportunities in the market, stating that high-quality properties never become cheaper, but they do become easier to purchase over time. He urged buyers to consider the value of a property rather than solely focusing on its price, noting that prime properties tend to retain their value even during market downturns. In contrast, properties with notable drawbacks such as irregular shapes, unfavorable locations, or proximity to infrastructure installations are more likely to experience price drops.
Addressing the timing of real estate purchases, Spencer advised potential buyers to make decisions based on their individual circumstances rather than attempting to predict market trends. He emphasised the risks associated with trying to time the market, citing the uncertainty surrounding global events and the lag in available data. Spencer highlighted that even if the bottom of the market were identified, it would only become apparent six months later, making it an elusive goal. Instead, he urged buyers to consider the suitability of a property based on their needs and long-term plans.
In concluding his remarks, Spencer drew a comparison between real estate and other investment options, highlighting the stability of the property market compared to the volatility of the stock market. He pointed out that the Australian real estate market benefits from a supportive economic framework established by the government and banks. With his characteristic enthusiasm, Spencer encouraged potential buyers to invest wisely and seize the potential rewards of the real estate market, emphasising that the best opportunities often arise during uncertain times.
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