We asked you, our readers, to vote on where you think the property market will be at the end of 2015 relative to beginning 2012. Thanks to all those who voted! Here are the results!
An overwhelming majority (80%) voted either down or up by less than 10%, with slightly more voting on the downside. To be honest, I had expected a higher number of people voting the extreme cases, but I guess our readers are a little more conservative with their opinions. In any case, let’s have a thought about what to do in each scenario.
1. Down by less than 10% (42%)
This is a tricky one. If you are looking to buy an investment property, then you can probably afford to wait a little, especially if you have other investment avenues. However, if you’re looking to buy a home and renting in the meantime, you’re probably better off taking the plunge. If you’re paying for housing anyway, it’s usually more productive to use the money to build your home equity than to pay your landlord’s mortgage payments.
2. Up by less than 10% (38%)
A slow, sustained increase in prices is quite positive for investors and home-buyers alike, as it indicates a normalization of prices and smaller probability of a bubble forming. Any future dips in prices are likely to be moderate as well. This is actually the most bullish scenario for the long-term investor and home-buyer.
3. Up by more than 20% (12%)
A more pronounced increase in prices is great for property speculators, but may not be good in the mid-long term as bubbles may form and burst, leading to investors being worse off. This is especially since the seller’s stamp duty would take a big chunk of profits in the first 2 years of buying the property. If you’re not already in, it may not be the best time to enter the market. Additionally, I would actually not advise home-buyers looking for a bargain to enter at this juncture.
4. Down by more than 30% (8%)
A no-brainer. Stash your cash and wait for the crash. Be ready to employ your cash to buy at bargain basement prices. However, as mentioned previously, credit may be pretty tight.