Well, the end of the year is in sight and, while there are still a few deals being done and a few smart investors are taking advantage of the opportunities that desperate sellers at this time of year can represent, I thought that this might be a good time to look back on the past year and see what we can learn from it.
Remember…“To acquire knowledge, one must study…but to acquire wisdom, one must observe.”
Lesson 1.
There will always be doomsayers and they will always want to convince us that “the sky is falling”. The biggest mistake any of us can make is to a. listen to them or b. act on their advice.
Lesson 2.
Whilst we can always make some generalisations about the market overall, every market is different and will behave in different ways. Even during the settling of the market over the past year or so, some suburbs have done markedly better than adjoining suburbs. The key to being an astute investor is to understand what drives the market over the longer term, so you are well placed to do better than the average.
Lesson 3.
No boom ever lasts forever. The remarkable growth in property values over the past 5 or 6 years was in itself a “once in a lifetime” event, and could not be sustained forever. Those who made investment decisions based on an assumption that growth in property values would continue unabated learned a hard lesson.
Lesson 4.
The fact that property values Australia-wide only settled back by 5% shows just how sound the overall market really is. In the longer term, there is every reason to believe that values will continue to double every 10 years or so.
Lesson 5.
At the end of the day, ensuring that you enjoy the best available returns from your investment is less about your timing of the market, and more about your time IN the market.
Cheers,
Bertram