Take a “big picture” look at market

Success in the property market requires a “big picture” attitude that will see you through the high and lows that cause short term upsets and dramas despite the undeniable long term success of the property market.

And the real winners are those who are not fooled by the sensational headlines that dominate the media when interest rates go up or prices experience a correction that is typically part of the very predictable boom-bust cycle.

No doubt you’ve seen the headlines – ‘interest rates rise again’, ‘US housing crisis to hit home’ and so on. While it’s true that the Australian property market is expected to experience a correction in the short to medium term that has nothing to do with the American crisis – it’s just part of the market’s traditional cycle. And the good news is that it’s not necessarily bad news for everyone.

It’s unfortunate that some households will feel the pain at this stage of the cycle it’s also true that there is going to be plenty of opportunity for those who are in a position to extend their involvement in the property market.

“There’s one big difference between the Australian market and the American market that will prevent a similar crisis occurring here,” said Re/Max property associate Michael Knights, an agent with almost 20 years experience.

And having visited the United States recently he has seen first hand just how dire their situation is.

“Over there people were allowed to borrow money even if they don’t have a job and have absolutely no deposit,” Mr Knights said.

“It’s important for the Aussie homeowner to know that the lending systems and mortgage services are very strict in Australia. And not everyone in Australia can buy property under the current rules of banking in Australia,” he said.

“It’s a sad fact of life but it’s a better situation than what’s happening in America where people can get into a home too easily and are then forced to walk away from it,” he said.

But those issues should not cloud the view of what is likely to be a period of great opportunity in the Australian market, and particularly the Sunshine Coast.

“For those who are in a position to borrow money there are some great opportunities just around the corner.

“I believe that the Sunshine Coast is the best place to live, to invest and hopefully make some real money along the way,” he said. “Obviously we can’t believe that the Coast market will keep rising year after year, although being a multiple property owner myself I would love to see that happen. But history shows that real estate is a cycle and it has a series of highs and lows and at the moment we are headed for an adjustment.

But many people are unsure of HOW to make money from the property market.

Here’s his checklist of things to do before you buy:

1. Get an equity check.

If you already own property have a market appraisal from an experienced agent or valuer. You will need to know how much you can borrow from the bank and how much equity you have to be in an informed position to buy an investment property or to down size or upgrade.

2. Meet with your bank manager or mortgage broker.

Find out all there is to know about redraw facilities, standard loans and interest only loans. Shop around for the best deal or facility to suit your needs. If you qualify for a redraw loan borrow what you can afford and have the money sitting in your account ready to buy as the market moves and adjusts.

3. Decide on a plan of attack (a business plan).

Buying and selling must be treated like a business. It is important to speak with an experienced agent, advisor or accountant before buying and selling. And when choosing a property to buy always look for those with opportunities to renovate or improve in ways that will add maximum value for minimum effort and cost.

4.Timing, when is the right time for you?

We have had what is called a mini-boom. The experts say “sell at the peak of a boom, buy on the way down or at the bottom of the cycle”. The trick is in identifying the boom time and when is down time – in fact many areas on the Coast are actually at their peak while others are already starting to adjust. The right answer depends on many things including where you live right now or where you are going and what you want to buy and for how long you want to hold the investment.

5. Do your research.

It is important to do your research of have somebody help you. Good agents are able to provide you with sales evidence in areas you are interested in. Agents won’t charge you for their time however they appreciate referrals if they provide you with a good service. And remember they only get paid if they sell your property. You could employ a buyer’s agent to research the market and look for what you are after. Buyer’s agents have different fee structures so make sure you know how much it will cost you to access their services.

For those who have done their homework there will be any number of opportunities to capitalise on what’s likely to be a confusing time as the property prices adjust to the market changes.

For more information contact the Michael Knights team on (07) 5452 4544 or

0415 455 826