The property market can seem like a complex beast, but understanding its movements can be a game-changer for both new and seasoned investors. One of the best tools for this is the property clock. The property clock helps make sense of the market by breaking it down into different phases, guiding buyers and investors on when to act for the best results.

What is the Property Clock?

The property clock offers a visual representation of the market’s cycle, divided into 12-hour segments. Each hour on the clock represents a different stage of the property market, from peak to recovery. Let’s walk through the clock to understand what each phase represents.

  • 12:00 – The Peak of the Market At this stage, the market is at its highest point. Prices are typically at their most expensive, and it can be a challenging time for buyers looking to enter the market.
  • 1:00 to 2:00 – Market Decline Begins After the peak, the market begins to cool down. Prices may start to fall, and it’s a signal for caution as the market enters the decline phase.
  • 3:00 – Official Decline At 3:00, the market is officially in a declining phase. Prices are lower, and sellers may start to struggle. For savvy buyers, this is an opportunity to purchase at lower prices.
  • 4:00 to 5:00 – Approaching the Bottom The market continues to decline, moving towards the bottom. It’s a time for those watching the market closely to prepare for a potential turn.
  • 6:00 – The Bottom of the Market This is where prices are at their lowest. For many buyers, this can be an excellent time to enter the market and purchase property at a bargain.
  • 7:00 to 8:00 – The Recovery Phase From here, the market starts its recovery. Prices begin to rise slowly, but they’re still relatively affordable compared to the peak.
  • 9:00 – The Rising Market The market continues to improve, and prices begin to climb more rapidly. This is often a time when demand picks up, and competition increases.
  • 10:00 to 11:00 – Approaching the Peak As the market nears its peak once again, prices are becoming more expensive, and buyers are starting to feel the pressure.

The Importance of Buying Low and Selling High

The fundamental principle of investing is simple: buy low and sell high. However, many people struggle with this when it comes to property. It’s common for potential buyers to feel nervous when the market is low and prices are dropping. But think about it—if you were purchasing a luxury item, such as a Louis Vuitton handbag, and the price dropped from $3,000 to $1,800, most people would see this as an opportunity to buy. The same logic applies to property.

The fear and anxiety that many people experience during a downturn often prevent them from seizing these opportunities. However, seasoned investors know that markets often present the best deals when they’re at their lowest point. The key is to manage emotions and not make decisions driven by doubt or fear.

Let’s take a look at the current state of the property market in Australia based on the property clock provided by Herron Todd White.

  • Peak of the Market
    Currently, some markets, such as Albany, Brisbane, and Sydney, are at the peak of the market. This means that property prices are at their highest, and it may not be the best time to buy unless you’re selling or looking to cash in on your investments.
  • Declining Market
    Areas like Alice Springs, Burnie, and Launceston are in a market decline. While prices are starting to fall, there are still opportunities to buy, particularly in areas where property prices are coming down but haven’t yet hit rock bottom.
  • Approaching the Bottom
    Markets such as Melbourne and Port Macquarie are approaching the bottom. For buyers, this could be an excellent opportunity to purchase before the market recovers.
  • Bottom of the Market
    Areas like Byron Bay, Hobart, and Coffs Harbour are currently at the bottom of the market. Buyers looking to get the best deals should keep an eye on these locations as prices are likely to rise soon.
  • Start of the Recovery
    The recovery is beginning in places like Albury, Bathurst, and Newcastle. It’s still an affordable time to buy, but prices are starting to climb, so the window of opportunity is closing.
  • Rising Market
    Markets like Perth, Rockhampton, and the Gold Coast are experiencing a rising market. Property prices are climbing, and it’s becoming a competitive environment for buyers.

Unit Market vs Housing Market

It’s important to note that the property clock for units and houses doesn’t always align. Sometimes a market may be struggling in housing while units are thriving, or vice versa. Here’s a breakdown of where units stand in the current cycle:

  • Peak of the Market for Units
    Similar to the housing market, units in markets like Albany and Bundaberg are at their peak.
  • Declining Market for Units
    Areas like Alice Springs and Sydney are seeing unit markets decline.
  • Bottom of the Market for Units
    Byron Bay and Geelong are at the bottom for units, making it a great time to consider buying in these areas.
  • Start of the Recovery for Units
    The recovery phase for units is underway in places like Albury and Central Coast.
  • Rising Market for Units
    Like houses, units in markets such as Perth and Rockhampton are rising, making it a competitive time for potential buyers.

Conclusion

Understanding the property clock is an invaluable tool for anyone interested in buying property, whether you’re a first-time homebuyer or an experienced investor. By recognising where a market is on the property clock, you can make more informed decisions about when to buy and sell. Don’t let fear or emotions drive your decisions—property investment is about strategy and timing. Keep an eye on the market, understand the phases, and use the property clock to your advantage.

Call to Action

Stay informed and take advantage of the current market trends. Whether you’re a first-time buyer or an investor looking to make your next move, understanding where you are on the property clock is the first step to success.