“Is now a good time to buy property?”
This is a question I am frequently asked and it is the wrong question to be asking. Let me explain.
Timing your entry into any market with confidence and certainty is impossible.
Because it relies on you being able to accurately predict the property market, or indeed any other market such as the stock exchange and shares investment.
And trying to predicting the market-any market-is a fool’s game that is bound to end in failure. Because there are too many variables.
Factors such as the performance of the economy, political events, global (or local) pandemics such as Covid-19, interest rates, the taxation environment, buyer sentiment, seller sentiment, supply and demand, inflation, availability of credit, etc.
The variables are endless.
The question you need to ask yourself instead is not when but whether you should buy a property, or invest in shares.
Because if you decided to buy a house or invest in shares your decision should be based on holding your asset(s) for the medium to long term, let’s say 10 to 25 years.
If you do buy a house or invest in shares and hold them for the long term it is almost certain that you will get a superb return on your investment. And whether you timed your purchaser or entry into the market with laser like precision will not matter in the overall scheme to things and given the rises and falls in any market over a period of time.
But you can be sure the value of your investment will rise inexorably over time.
Whether you buy a house, or invest in shares, will depend on your own individual circumstances.
For example, do you need a house? Have you a growing family? Are you settled in your career or are you likely to be obliged to relocate in the near future? Have you secure employment? Are there any other factors you ought to consider?
As for investing in shares, on the other hand, have you the mental fortitude to live with the daily rises and falls of the stock market? Would this send you into a spin of panic and alarm or would you be able to take the rough with the smooth secure in the knowledge that you are in the market for the long term and you are confident that you have invested in fundamentally sound companies.
When to invest in a market is the wrong question to be asking, you will never get your timing perfect. Whether you should invest is the key question, and only you can answer this.