This is a question I hear quite a lot. Everyone seems uncertain, and basically wants to know the future – at least near-term.
There are plenty of pundits and experts offering their version of what’s going to happen next. D’you remember when the COVID emergency came upon us, how those experts quickly began predicting how the market was going to crash?
It didn’t. Instead, the property market went on an almost unprecedented tear, with today’s residential prices as much as 40% and more, higher than they were just a couple of years ago. Those who predicted the crash are still in business, predicting the future with as much confidence as ever.
There’s a big difference between collecting data to show, for instance, how prices in one suburb have risen or fallen more than in surrounding areas. And of course, it’s possible to put those figures into graphs showing recent or long-term trends. But the temptation with graphs is to extend the line out to the right and expect that in the next few months or years, prices will perform in a particular way.
This can be a trap for at least two reasons:
The saying in financial circles that past performance is no (NO) indicator of future results is very applicable here. The untidy fact is that nobody – nobody – knows the future for certain. In ancient times prophets were executed if their prophecies turned out to be wrong, but we’ll leave that discussion for another day. The reality is that when trying to look into the future, the best anyone can do is to make an educated guess, based on whatever data and experience they have in the present. So if someone tells you that property values in a particular suburb or town are about to skyrocket, you should always remember that the more people who hear and believe it’s true, and act upon it, the more it becomes a temporary self-fulfilling prophecy.
The property itself and your ability to control it. Every dwelling slowly but surely deteriorates. Owners who properly maintain and repair them find that the value of their homes surpasses the surrounding homes owned by neglectful owners.
So change your focus from the fluctuating median prices in a suburb (which you cannot control), and instead concentrate on finding ways to improve your own individual property (which you can control). This way you can generate rising value, even while surrounded by stagnant or even sliding values nearby.
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This is a question I hear quite a lot. Everyone seems uncertain, and basically wants to know the future – at least near-term.
There are plenty of pundits and experts offering their version of what’s going to happen next. D’you remember when the COVID emergency came upon us, how those experts quickly began predicting how the market was going to crash?
It didn’t. Instead, the property market went on an almost unprecedented tear, with today’s residential prices as much as 40% and more, higher than they were just a couple of years ago. Those who predicted the crash are still in business, predicting the future with as much confidence as ever.
There’s a big difference between collecting data to show, for instance, how prices in one suburb have risen or fallen more than in surrounding areas. And of course, it’s possible to put those figures into graphs showing recent or long-term trends. But the temptation with graphs is to extend the line out to the right and expect that in the next few months or years, prices will perform in a particular way.
This can be a trap for at least two reasons:
So change your focus from the fluctuating median prices in a suburb (which you cannot control), and instead concentrate on finding ways to improve your own individual property (which you can control). This way you can generate rising value, even while surrounded by stagnant or even sliding values nearby.