- by Ed Chan
- in Home Ownership Affordability Property Investment Property Market Updates Wealth Creation
The Australian (newspaper) on the weekend predicted a 10% growth in the property market in 2020.
Whether that will happen or not is yet to be seen. But what is true is that there is not just one property market, as being suggested in the report, but there are several markets within the major cities.
They all go up and down in different cycles.
How Property Prices Go Up and Down
It starts at the more desirable suburbs such as the eastern suburbs and as it gets too expensive, people “ripple” out to the cheaper suburbs dragging the prices up.
People also upgrade to better suburbs as they get wealthier.
Since there is finite stock in those “more desirable” suburbs and more and more people want to live there, it pushes the prices up.
Should You Buy Property in 2020?
We will continue to see prices go up and different suburbs will continue to accommodate the needs of those in different income and wealth brackets.
Waiting for the prices to come down is a Hope Strategy and that won’t get you anywhere.
It will only adjust by 10% to 15% for a short time and then start to increase again, forcing the less well-off to the outer suburbs.
It’s best to buy as soon as you can afford to and ride the ups and downs as the market adjusts to the different forces in play to do with supply and demand but the trend line will always be up over the long term.
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