Four reasons to buy in a cool market

By Monica Boyd

Some of the smartest investors follow the well-known saying ‘buy straw hats in winter’; the same applies to property

It’s a common mistake made by many first-time investors – delaying an acquisition due to a cooling market. So why can it be wise to buy in a downturn?

It’s widely known that property markets are cyclical and will experience ebbs and flows.

However, when any given market experiences a slowdown, many investors, particularly novice investors, will defer buying a property because they’re deterred by the widespread negative sentiment.

Acquiring an investment property in a cooler market can be highly beneficial, though.

Here are four reasons to purchase an investment property when the market is idling.

1. Fewer buyers. You’ll face less competition because many investors will wait to make an acquisition until the next upswing in the market. Unfortunately, many investors will wait too long and miss out on the capital growth in the next upswing.

2. Wider choice. Typically, there will be a significant increase in housing stock on the market during a cooler period. Subsequently, buyers will have a wider choice.

3. Value for money. With less buyers and more sales stock, sellers are forced to price their properties more competitively meaning investors can secure a better deal.

4. More control. With fewer buyers in the market, investors can have more control over contract negotiations to ensure clauses and terms of sale are weighed in their favour.

Some of the smartest investors follow the well-known saying “buy straw hats in winter” and the same applies to property – buy great properties when no one else is buying.

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