The best tips for rising & falling markets

will the annual spring jump in listings result in an oversupply and a market drop? Or will reduced interest rate angst boost buyer confidence and see a shift upwards?

Rather than speculate, below are some tried and true strategies for investors navigating market shifts in both directions.

A rising market

Increasingly crowded inspections, throngs of auction bidders and escalating clearance rates are strong signs the market is shifting upwards and prices are following suit.

Buyer tips:

• Don’t get stuck on price. Values for quality property can move rapidly. Don’t be left chasing the market. Locking something in for a little extra now will pay dividends as the market moves up.

• Past sales comparisons quickly lose relevance as surging demand pushes the market to new heights.

• Broaden your search. Rising markets can push some areas out of affordability quickly. Consider expanding your search to neighbouring areas you hadn’t initially considered.

• Make unconditional offers. They’re more attractive to a vendor, and can help tip the scales in your favour within a competitive buyer pool.

• Don’t overextend financially. While it’s important to stay ahead of the market, don’t push yourself to the brink.

• Beware of FOMO. Don’t let emotions rule your decision and be left holding something unsuitable or too expensive.

A falling market

While excitement and action tend to dominate rising markets, a shift downwards tends to be subdued and sparse — empty inspections, lacklustre bidding, high pass-in rates, and sliding prices.

Buyer tips:

• Negotiate decisively. If you’re the only interested buyer, you have strong leverage on price and terms of sale.

• Avoid trying to pick the bottom. Markets are unpredictable, don’t risk suddenly being priced out of a quality property if prices quickly turn.

• Broaden your search. The inverse of a rising market — diminishing demand and prices – may bring previously unaffordable areas within reach.

• Seek value over bargains. Quality properties are rarely heavily discounted. Pay a fair price and avoid being stuck with a lemon.