One of the most significant trends seen
over and over in the past almost 50 years of being a student of economics is
that investment markets constantly go through cyclical phases of good times and
bad.
However, it’s a common fallacy that
Australian property cycles last 7-10 years.
They vary in length and are affected by
a myriad of social and economic factors and then, at times, the government
lengthens or shortens the cycle by changing economic policies or interest
rates.
Market sentiment is one of the key
drivers of property cycles and one of the reasons why our markets overreact,
overshooting the mark during booms and getting too depressed during slumps.
Of course, cyclical events can also
create opportunities.
Remember that each property boom sets
us up for the next downturn, just as each downturn sets the scene for the next
upswing.
But it’s important to try and avoid
being thrown off well-thought-out long-term investment strategies by cyclical swings in markets.
It's very difficult to make sound
financial decisions unless you know what you want to achieve/ If you don't have
a plan you tend to default to what other people are doing or what the media is
telling you.
RealRenta has all the tools that a property manager has but for
less than ¼ the cost of a property manager.
Join now and the cost is less than a cup of coffee a week to manage your
rental property.
RealRenta also has a free vision, so why not check it out.
Jason Gwerder
Friday, 26 May 2023
