Property investors play the long game

Article written by Kieran Clair, published by Realestate.com 11 AUG 2017
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TIME in the market, not timing the market, looked to be the approach for almost half of our nation’s real estate investors according to a recent survey by mortgage broker, Mortgage Choice.

Mortgage Choice’s annual Investor Survey revealed 45.6 per cent of Australian investors plan on holding their investment for a minimum of 10 years.

Mortgage Choice CEO, John Flavell, said savvy property investors understood success comes from a long-term strategy.

“Property investing is not a ‘get rich quick’ scheme. Potential property investors shouldn’t invest in this particular asset class if they believe that they are going to make a lot of money overnight,” said Mr Flavell.

“In fact, most of the time when it comes to property investment, the longer you hold onto the dwelling, the more money you stand to make’” he said.

Mr Flavell said the high costs of trading property such as advertising, agent’s commission and stamp duty meant owners preferred to hold on.

“Moreover, the housing market moves in cycles and it will go through highs and lows,” he said.

“So, if you buy at the top of the market and plan to sell it a few years later, you may find that the market has softened and you could end up making a loss on your investment.

“National figures from CoreLogic’s recent Pain & Gain report found that in the March 2017 quarter, houses that resold at a profit had typically been owned for 9.1 years, and apartments that resold at a profit had been held for 7.6 years,” Mr Flavell said.

“On the other hand, houses that resold for a loss had typically been owned for 6.3 years, while apartments that resold for a loss had typically been owned for 6.9 years.”