Driving to Auckland Airport today for yet another flight I was called by TV 3 to ask if I would agree to an interview for the 6pm news regarding our latest company statistics and also for a comment as to if now is a good time to buy (in my opinion) As usual I agreed as I find it strange that many in our industry won’t make an effort to assist the media and then complain that the stories published lack balance, strange really.

The crew met me on the side of the road, set up, and the questions commenced.

My view, which I expressed and I’m sure will be interpreted by many as another real estate agent talking up the market, is that now is a great time to buy!

I base this on several beliefs.

Firstly my belief is that the majority of us buy property as a home for ourselves and our families, we don’t buy for short term gain from buying or selling and the reality is that while we all like to tell our friends that we are negotiating guru’s and we have bought unbelievably cheaply the most important criteria for purchase is location, suitability for lifestyle and family requirements in addition to our ability to afford the purchase and ongoing financial commitment of the mortgage we take out, if we do actually need one as most of us do!

Basing my advice on this premise we see an environment where mortgage money is as cheap or cheaper than we have seen for some time, property is more affordable than we have seen for some time and there is a great range of property available for purchase being offered for sale by sellers very well educated in the reality of the current market. So right or wrong my opinion is now is a great time to buy!

The interviewer then asked the question on everyone’s lips, are we at the bottom of the market yet? Great question and one every one of us, as negotiating gurus, wants to know the answer to. I have the answer! The only way to know if the market has reached the bottom is to wait until it starts rising again! This is the same way you know a market has reached the peak. It starts falling, so the question I have posed before remains. If now isn’t the time for you to buy how far will the market need to rise before you decide it is?

Trying to time the market, sell at the top, buy at the bottom should be left to the property traders. They buy and sell and either make or lose money based on their own judgment. If they win they take a profit, celebrate, pay their tax and move to the next deal. If they lose they should take their loss, don’t blame anyone apart from themselves and move on to their next deal as that is their business.

For the majority of us however we buy property for long term ownership, for our own accommodation or investment, so short term fluctuations, up or down, shouldn’t worry us as we aren’t looking for short term gain. Over time property has always fluctuated but has always increased in value over time. The fact is that for the majority of us timing of the market is far less relevant than time in the market as what looked expensive today will be cheap in the future and what may have looked cheap yesterday may indeed look expensive today if you are in a position where you are forced to sell.

My advice then to buyers is do your homework, make sure the property fits as many of your needs as possible and that the purchase fits your financial criteria, and then buy. If not move onto the next property and do the same until you find one that does fit your criteria.

If however you don’t believe in property as a significant asset for your family, lifestyle or investment then back your judgment and have an alternative plan.

Interesting to note that during and after the filming of this interview I was speaking to a local resident we met in the street who had in his hand a report from a high profile finance company that currently has his investment funds and will not be paying any return or capital back to him for at least 13 years, if ever, and there is nothing he can do about it. I think that he would prefer to have these funds invested in a property that he controlled even if the property had slipped slightly in value over the last 12 months.

Food for thought isn’t it in regard to where you invest your money For me it’s property and the time to buy is now but then some would say I am just another real estate guy trying to talk the market up.

I’d prefer to say I express my opinion and the basis of this opinion. I also back my judgment with action that involves my families own money.

Do the critics?

This entry was posted on Tuesday, November 25th, 2008 at 4:19 pm and is filed under Real Estate Industry Comment, Real Estate Market Comment. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.