Login
The perfect portfolio test: Why investors should wait and analyse before switching strategy
Rather than jumping the gun and reacting to market changes, investors should take a patient approach and trust their long-term plans.
With the property market undergoing significant change, many investors have taken this time to reconsider their portfolio plans.
Pure Property Investment buyer’s agent Aaron Findlay said the recent market changes have put more pressure on investors to manage their portfolios.
Rather than letting it influence their decision making, Findlay said that investors should view the period as a “fitness test” for their portfolio.
“We’re in the period of the marathon where all the front runners are dropping back because they’re gassed,” he said.
“We are at the point where you have got to find your rhythm and find a cruising speed.”
He said that if investors could hold on to their properties despite higher holding costs, they would have an advantage once the market rebalanced.
Findlay said that once prices began to rise and demand returned to the market, investors who held their assets through the tougher period would be the first to benefit.
“When the rest of the field comes in and when conditions are easier, we are going to see that yield compression and naturally prices are going to rise,” Findlay said.
“There is going to be more demand, but you’ll have been there from the start, when other people necessarily didn’t want to be there.”
Additionally, Pure Property Investment founder and director Paul Glossop said uncertainty over when the Reserve Bank would cut rates had left the market and its investors in limbo.
He said motivated investors should look for opportunities in the current market to set up the next stage of portfolio growth.
“You don’t want to be sitting at the back end of this, which might be four and a half or five years away and thinking, ‘I missed that opportunity,” Glossop said.
“I think we aren’t in a three- to six-month recovery. I think it’s going to be somewhere between six to nine months before we find where this market is going to land.”
Free investor loan check
Better property decisions start with smarter lending.
A free 15-minute finance check for property investors.
What are your lending goals?
Choose a goal to request a callback.
Ready to talk?
Book a 15-minute call →Finni Pty Ltd · Australian Credit Licence 384324 · Privacy
Navigating the current market conditions
According to Findlay, while it’s important to monitor market movements and cycles, investors need to look beyond them and analyse long-term impacts.
“You have to not be a prisoner of the moment and look at the context of all the various panics that we generally have month on month,” Findlay said.
“We’ve had a few big changes lately and no doubt we’ll have some more in the coming months, but we just have to stick to the plan, and I think that’ll work out.”
Similarly, Glossop said it was important to note that fluctuations were part of the property market’s typical movements.
He said that over his career, he had seen similar movements on several occasions, and each time, the market eventually rebalanced itself.
While market conditions could present opportunities for new investors, Glossop said it was important that they understood the value in staying consistent with their strategy.
“You have to take some confidence in the fact that we’ve been here before and the outcome will be relatively predictable,” Glossop said.
“This is probably the best opportunity for those who are out there to be pragmatic, to be patient, and to be consistent.”
Listen to the whole episode here.
Want to see more stories from trusted news sources?
Make Smart Property Investment a preferred news source on Google.
Click here to add Smart Property Investment as a preferred news source.