Are we there yet?
It’s amazing how the messages in the media have changed in the space of a few weeks.
Not that long ago they were talking about property prices falling significantly further, now they’re asking have we reached the market bottom.
So how do you pick the turning point in the property market?
That’s what Michael Yardney & Dr. Andrew Wilson discuss this week.
As they say – no one rings a bell when we reach the bottom and rather than trying to be smart and pick the bottom, It seems like this is now a great time to buy countercyclically – you’ll probably look very smart when you look back in 10 years time.
Some of the parameters they follow are: -
1. Economic fundamentals – the property market doesn’t work in isolation
1. GDP
2. Inflation
3. Employment growth / Unemployment
2. Market Sentiment
1. Consumer sentiment – increased google searches – ANZ house search index
2. Unemployment rates
3. Business sentiment
3. Affordability
1. Availability of credit – looser lending
2. Lower interest rates
3. Wages growth
4. Supply and demand
1. Population growth – household formation
2. Building approvals
3. Supply pipeline
5. Metrics including
1. Housing credit growth – leading indicator
2. Days on market
3. Vendor discounting
4. Auction clearance rates
5. Turnover of properties
6. The number of properties listed for sale
7. Asking prices – the Wilson index
8. Rental vacancies (for investors)