Perfect time for buyers to spring into low market

Perfect time for buyers to spring into low market-The American businessman and multi-billionaire Warren Buffett lives by the mantra to be "fearful when everyone is greedy and greedy when everyone in fearful".

While I am not comfortable with the idea of being greedy, the logic behind his statement is to buy low and sell high.

The current market sentiment is the property market is low and is going to get worse before it gets better. While I agree with this as a short-term outlook, I am not convinced this will be the case over the long term.


Traditionally, property markets enter their weakest phase in the spring market. This is because vendors believe when the sun is out and the garden is blooming that is the best time to sell.

Purchasers on the other hand have a different psychology. While we do see a slight increase in demand from purchasers it starts to soften the closer we get to Christmas. Many purchasers decide to put off entering the market until the following year.


In short, more vendors enter the market in spring while purchasers begin to leave.

The market is currently on its knees, but there are positive signs on the horizon that suggest it may not be for long.

Stable, and potentially falling, interest rate news always provide a good spark to the market and now new superannuation rules look to increase the flow of super dollars into the established property market. In the past, super funds were not able to invest in the "worst house in the best street" because the rules did not allow them to renovate these properties.

All this is set to change as long as the super fund does not borrow the money for the renovations. The trustee of the fund will be able to use surplus cash to make any improvements.

Superannuation money has traditionally sat on the sidelines of the established property market. But global instability in sharemarkets and changes to superannuation laws like this will only increase their desire to look for other opportunities.

Does that mean you should buy this spring? Well, yes and no. If you are looking to purchase a home or investment with a long-term view, at least 10 years, then this spring may provide some good options.

On the other hand, if you are looking to enter the property market with a speculative approach – with a short-term hold, less than five years – then this market is not the right time to make your move.

The property market has had some very strong growth in recent years and history shows us the market will show a more sustainable growth pattern and, in some areas, values may soften further.

In this environment, the short-property play is not a wise option, however, if you follow Buffett's advice to buy well and hold your position, now is a great time to watch the market and prepare yourself to be "greedy".