“The Long Game of Property Investment: Time in the Market”

Posted by Joshua Mellick

If you’re anything like me, each year seems to go by faster. Before I know it, I’ll be married with two or three kids, thinking about where the time has gone. But I’ve got some time before that, I hope. The current state of the property market, with limited supply, affordability worries, interest rates, a surge in overseas migration, and an increasing rental market, has prompted me to think about the concept of time.

Everyone who wants to become wealthy seems to be fixated on getting there quickly. In property, that would be timing the market. Essentially, it is buying at the bottom and selling at the top of the market. If you’re lucky enough to do this, great work! But have you ever considered “time in the market”?

Time in the market means you avoid trying to predict. You invest, accepting that your timing may be off. Instead, you focus on buying good property with great underlying fundamentals. In the long run, these will have a more significant impact than timing alone.

Over the last 40 years, Melbourne’s housing market has grown by 8.7% per annum, Sydney by 8.6%, and Brisbane by 7.9%. In other words, well-located properties in our three big capital cities have more than doubled in value every ten years.

It’s important to remember that each state has its own property cycle, which can have years of minimal or no growth before seeing a strong period of high growth. This only confirms that holding property over the long term is nearly always the best plan for most people.

As we look into 2024, a recent report by KPMG predicts that house prices are expected to rise by 4.9% nationally over the next nine months before surging 9.4% in the 12 months to June 2025. Apartment prices will rise by 3.1% by next June before increasing by 6% in the next 12 months.

So, if you’re considering getting into the market, remember the best time to do something is probably when others aren’t doing anything. And that good property is incredibly forgiving of imperfect timing – all you have to do is wait. Have a plan and invest with the mindset that this is a long-term game. Time in the market is, more often than not, a better approach for most people than trying to time the market.

Posted by Joshua Mellick, on 3rd Oct 2023