Ever seen or heard of a property clock? – most likely not….. Here’s why it could change how and where you invest:
The attached is a property clock which published monthly by National valuation firm, Herron, Todd White (HTW) and is an overall indication of where they believe each market around the country presently sits. As you can see 12 o’clock represents the peak of the market and 6pm the bottom, with 3 o’clock and 9 o’clock representing declining or rising markets accordingly. Although a property clock does not provide specific growth or decline figures it can be used as a guide for where investors could look to invest – or more importantly, where to avoid.
A word of caution though. HTW issue separate property clocks for houses, units and commercial properties because each of these property types may be performing differently at any given time. For example, Adelaide offices are shown as ‘approaching bottom of market,’ units are ‘starting recovery’ whereas houses are a ‘rising market.’ Further to this, micro-markets also exist within a State and often perform quite differently – hence in NSW the Far-North Coast, Mid-North Coast and Central Coast are shown at different places on the property clock.
So why is the local real estate agent talking up how great things are when the media is talking about corrections and declines in the property market? Are these agents just doing the ‘sales routine’ and putting on a brave face to make things seem better than they really are?
The answer is most likely, no. Sure, real estate agents are not generally considered to be the most ethical people on the planet – in fact, they are consistently voted as one of the least trusted professions, sharing the limelight with politicians, advertising people and used car salesmen! These agents are probably operating in a market that is actually performing well and the media as a whole is reporting only on the country’s largest market, Sydney – which is generally experiencing a slow-down after a long time in the sunshine.