When is the best time to Buy?

When is the best time to buy Mangos? Or petrol? When is the best time to buy shares? What about property?

If you are like me and love the taste of Mangos during the warm summer months, then you would also know that the price of mangos fluctuates considerably during the year. Mangos being a summer fruit are a seasonal commodity, which means that supply is extremely limited during winter (ie higher prices), yet is abundant during summer (with lower prices). You can just about pick the mid-point of the mango price cycle which occurs just after Christmas time when a box of 20 costs approx $15 to $20 in the Sydney market (ie around 75 cents each). Either side of the peak summer period a box may cost around $20 to $30 while in winter imported mangos are sold at anything from $2 to $5 each (ie $40 to $100 per box).

With petrol prices, things are a bit different. Petrol is an essential item- we need it to fuel our cars and the transport system. Petrol prices have risen substantially due to higher crude oil prices. Cheap Tuesdays provides the best opportunity to buy at a slightly lower price and give a little relief to our common petrol pain.

And what about shares? Should you invest in shares when everything is going great and the ASX is rising quickly? Or is there a golden opportunity behind every downturn and a chance to buy blue chip stocks at a substantial discount to fundamental long term value? The current volatility on the Australian sharemarket has provided some great opportunities to seek out stocks that will provide solid long term yields and capital growth over the long term.

So what have mangos, petrol and shares got to do with property prices I hear you say? Well in a nutshell, if you want to get a bigger bang for your dollar then you need to consider the timing of your property purchase – ie buy when you can get the best value. While property prices are simplistically explained by the forces of supply and demand there are many factors driving each side of the equation. I will cover supply and demand issues in another edition as they are quite complex in many respects.

However, one critical factor in the current market is the massive undersupply of houses required to house our growing population. There is a growing pent-up demand in housing that the ANZ bank is predicting could lead to the “Mother of all housing booms” in the coming years. Record numbers of new migrants are coming into Australia - approx 31,000 extra with a predicted total of around 180,000 for the coming year. Across Australia we need around 200,000 new dwellings each year, but there is a growing gap between as shown in the chart below. This growing imbalance means that property prices are likely to be well supported even despite the negative sentiment in the market.

The key points to note about the issue of timing your purchase are:
• Don’t follow the herd – you can time your purchase to optimise your capital gain.
• Invest in a counter-cyclical manner to maximise your returns.
• Do your research and make property purchasing decisions based on true value- not media spin or hearsay, or web blogs.
• Buy when you can get your finance approved - if you wait till all your stars are in alignment you may never end up buying anything.
• If you are thinking about upgrading to another home, it is better to do it now while the market is soft. Why? Because your change over costs are lower if you buy in the same market. If you wait too long between selling and buying you might find that by the time you have finally found your next place, the market may have moved upward (depending on the area).
• If you are an investor, you will benefit from rising rents, and start your investment from a lower cost base.
• NOW is a great time to buy, because while there is uncertainty in the economic climate, there is less competition amongst buyers and you can generally get a better deal.

Article Source: http://www.articles2use.com - a Rentaccomspain.com company.

Rich Harvey, Founder & Managing Director of Property Buyers has great knowledge about Sydney Buyers Agent and Sydney Investment Property. For more information he recommends you to visit www.propertybuyer.com.au/

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