Don’t Panic Sell in a Softening Market - May 2022
May 13, 2022 / Written by Rich Harvey
There’s a little panic seeping into Sydney and Melbourne’s property markets. Interest rate rises, increasing cost of living, Federal election paralysis and ongoing international challenges have converged to put the brakes on our extraordinary price growth.
This presents a quandary for owners, especially recent buyers. They’re asking themselves whether it’s smart to take the profit (or stem future losses) by selling out now, or hold firm wait for things to turn around.
First, let me say that whatever move you decide to make should be based on your own personal circumstances. That said, throughout my years of experience I’ve seen the real money made not in selling too soon, but by holding for the long-term.
Here’s why staying the course should be your first instinct.
Principles of wealth
There are some fundamental principles which ensure you make the most impressive gains from long-term real estate ownership.
Firstly, property prices move in cycles – but they aren’t those even up-and-down waves you used to see in science class. Rather, markets over the long term tend to rise, then fall modestly to a plateau before rising again.
To illustrate, here’s a chart of Sydney’s quarterly median house price from March 2002 to October 2021:
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