Press Releases
Do You Understand The Property Cycle?

In conclusion, reading the property cycle correctly is very important when investing in rental property. The initial investment is huge, and constant upkeep can be an enormous drain on resources. Coming into the cycle at the wrong time can be disastrous.


, 6 December 2017

Do You Understand The Property Cycle?

Buying a rental property is generally considered to be a long term investment. However, for the astute investor, money can be made in shorter periods by diversifying your portfolio and learning to read the property cycle. Does that sound far-fetched? Baxton Property Management in Hobart takes a look at how the property cycle works. It’s a given that you cannot hope to succeed in the property market unless you do your homework. You are using a sizeable chunk of capital when you invest in rental property, so you want to know that you have bought wisely to maximise return on capital. The Property Cycle Phases Baxton CEO Kellee Pennicott says, “It’s a widely accepted economic fact, the property market will rise over time”, historically it’s risen by 10% a year for the last 100 years, but within each 100 years, “there are cycles of roughly 7 to 10 years each.” Pennicott continued. “The critical consideration in making money over the medium term through property investment, is to pinpoint the right time in that cycle to take action - whether it’s to buy-to-let, or to gauge the right time to sell” Pennicott stated. It is generally accepted amongst property investors and analysts that there are four phases to the property cycle. Different commentators have different names for them, but all agree on the characteristics of the various phases. The Value or Stagnant Phase: In this phase prices are stable, and there is little movement in the market. Many consider this the best time to buy, and it’s definitely not the best time to sell. If you have capital available, this is the time to pick up good deals from desperate sellers. The only thing you have to be sure about is that the market has, in fact, reached the bottom. A canny investor will wait until prises start to rise slightly. The Growth Phase: Prices start to rise, but not too quickly at first. The vacancy rate will start to fall and rent prices slowly start to increase. Investors realise the potential in the area and start to climb on board. The Peak Phase: As more and more investors start to pile in, prices start rising a lot more quickly, in fact, prices can go up by 20% a year in this phase as has been happening in Hobart for the past year. It is normally quite a short phase. Supply starts to outstrip demand, as more and more investors try to cash in on the rising prices by selling their property. The Correction, Fall or Slump Phase: Prices start to cool because of oversupply. Vacancy rates start to rise and rental prices start to drop, in an attempt to compensate for this. This can be very stressful for new investors that bought during the Peak Phase, which is the wrong time in the cycle to buy. Additional Factors That Influence Cycles Banks: The willingness of banks to write new loans can affect the property market. Obviously, they tend to tighten their lending criteria during the fall phase. Infrastructure: The announcement of a new infrastructure project like a mine, a dam or even a shopping mall, will stimulate the property market in the applicable area. A good source to gather information on any planned developments would be the local council or state website. Population Growth: If birth rates rise, it would be logical to assume that there will be a corresponding demand for housing in x number of years. The government provides information on population growth statistics. Interest Rates: Lowering the interest rate is a mechanism to stimulate economic activity and would indicate the end of the stagnant phase. Geographic Location: The whole of Australia doesn’t experience these phases at the same time. Different areas will be at different phases at different times. Investors should be sure to determine which phase the area they want to invest in, is experiencing. Pennicott says, “While it’s great to sell property in a boom market, Capital Gains Tax can wreak havoc on investor profits." Baxton Property Management currently supports all rental property investors by providing specialist property management services across Hobart, West Hobart, South Hobart, North Hobart, New Town, Moonah, Glenorchy, Sandy Bay, Dynnyrne, Tolmans Hill, Kingston, Kingston Beach, Tinderbox, Blackmans Bay, Taroona, Lindisfarne, Howrah, and Sorrel in Tasmania as well as the Sunshine Coast in Queensland. “In 2018, we intend to vastly spread our specialist services across Australia” Pennicott stated.

# # #


Submitted by prcagency, Press Dev on Wednesday, 6 December 2017 at 6:12 AM
Category: Economy
Related News

Get The Best Eden Prairie Online Branding Lead Generation Internet Marketing Solutions
Wednesday, 17 Oct 2018

Loan Officer Crystal Tani welcomed by Las Vegas's All American Home Mortgage and owner Scott Allan
Tuesday, 16 Oct 2018

Understand the Definition of the Real Estate Agent's Fiduciary Duties and Its Benefits.
Tuesday, 16 Oct 2018

Get The Best Bromley Croydon Online Branding Review Generation Commercial Production Solutions
Tuesday, 16 Oct 2018

Get More Leads & Increase Sales With Video Marketing Services From This Atlanta Ad Expert
Monday, 15 Oct 2018

Related Events

Digital Growth Unleashed London 2018
Wednesday, 17 Oct 2018

Predictive Analytics World London 2018
Wednesday, 17 Oct 2018

CRU Ryan's Notes Ferroalloys Conference 2018, Orlando, Florida, USA
Sunday, 21 Oct 2018

SAP Intelligent Enterprise Journey for Oil and Gas
Thursday, 25 Oct 2018

ICO’s Are Dead! What's next...? Location: Nasdaq Entrepreneurial Center
Thursday, 25 Oct 2018

Latest News

Are You In The Market For Forklift Tires?
Wednesday, 17 Oct 2018

How Can You Grow Your Instagram Followers?
Wednesday, 17 Oct 2018

Everything You Want to Know About the Global Molasses Market
Wednesday, 17 Oct 2018

Removing Stains from Washing Handmade Rugs
Wednesday, 17 Oct 2018

Plant Growth Regulators Market – Overview of Vital Industry Drivers
Wednesday, 17 Oct 2018

Want to get your press releases, event listings, and job ads on Scoopasia? Register now for a FREE account or login if you already have one!
Scoopasia v1.0b. Copyright © 2018
Today is Thursday, 18 October 2018

About Scoopasia | FAQ | Privacy Policy | Contact Us

Press Releases
Event Listings
Job Listings
Arts & Entertainment
Architecture & Construction
Automotive & Travel
Consumer Technology
Enterprise Technology
Food & Fashion
Government & Policy
Health Care & Medical
News & Media
Science & Research
Sports & Fitness
Login / Register
Get Scoopasia through RSS Feeds & Email Notifications!

Journalist's Toolbox
Hello journalist, welcome to Scoopasia--a powerful online resource for media information in Asia. Scoopasia has press releases and media events for every beat and industry. All content on Scoopasia is 100% FREE. You don't even need to login!

  • Scoop Line
    (Instant Information Request)
    The easiest way to ask questions and request information from the PR community.

  • Advanced Search
    Drill down, dig deep, for media information the way you want it.

  • Journalist's Resources
    Resources and tools you can't do without.

  • PR Tools
    Scoopasia Blog Search
    Search the largest handpicked collection of Asia's most prominent and influential blogs.

  • PR Bookmarks
  • Web 2.0 Bookmarks
  • Media Bookmarks

    More Coming Soon...

  • Upcoming Events
  • 9th International Conference on Antimicrobial Agents in Veterinary Medicine
  • SPE International Hydraulic Fracturing Technology Conference and Exhibition
  • Cloud Security Summit
  • 12th Digital Pharma East
  • Solar & Storage Live - 16-18 October 2018, NEC, Birmingham, UK

  • Latest Jobs
    Sorry, there are currently no entries posted here.