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5 Property Investment mistakes to avoid in 2023

2023 promises to be a noteworthy year for the Brisbane and Gold Coast real estate markets. With interest rates at their highest in years, this current market is causing anxiety for investors who have not previously invested during a downturn. However, it’s important to remember that the market operates in cycles, and once this decline ends, well-situated and well-maintained homes will continue to appreciate in value.

Whilst the  Australian property market is primarily influenced and driven by owner-occupiers,  property booms are often triggered by investors’ fear of missing out, and property downturns are intensified by investors’ fear of buying early. If history repeats itself (and we see another mild downturn similar to 2019) then investors must  be aware of these common human errors that often occur when the market changes direction. 


Not understanding property cycles

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The property market, like any other market, goes through cycles of booms and busts. These cycles are characterised by periods of rising property values, followed by periods of flat or declining values. This is a normal part of the market and should be expected by investors. However, many new or amateur investors may not be aware of this and may be caught off guard when property values start to decline.

“It important for investors to understand that these declines are temporary and the long-term trend is for property values to increase, especially in vibrant and popular cities like Brisbane and the Gold Coast. South East Queensland will continue to enjoy both population and economic growth, as well as other positive factors that will drive property values upward over time. Ina nutshell , while there may be short-term fluctuations, the overall trend is upward” says Bernice Cooper of Mercer and Cooper.

 


Not sticking to their real estate investment plan

 

When the property market goes through a downturn, it can be very tempting for investors to sell their properties and move on to other investments. This is a natural response to the uncertainty and fear that often comes with market declines. However, it is important for investors to remember that these declines are usually temporary and that property markets have a long-term upward trend. 

Instead of focusing on the short-term fluctuations, investors should remind themselves of the reasons why they initially decided to invest in property. This could be for long-term financial gain, as a retirement plan, or as a way to generate rental income. By keeping these long-term goals in mind, investors can avoid making hasty decisions based on short-term market fluctuations and instead maintain a consistent investment strategy.

 

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Changing their real estate investment plan

 

Many investors are basing their long-term decisions on recent social media headlines or friends and family instead of considering the overall fundamentals. If your goal is financial independence, now is not the time to abandon a proven strategy. Successful investors stick to proven methods and don’t chase the latest trend. They invest in properties with strong potential for long-term demand from both homeowners and investors, rather than searching for a quick profit in the latest hot market.

 

South East Queensland will continue to enjoy both population and economic growth, as well as other positive factors that will drive property values upward over time. Ina nutshell , while there may be short-term fluctuations, the overall trend is upward.

Bernice Cooper


Attempting to time the property market

 

Experienced investors know that no one can predict the exact timing of market changes with certainty. However, some novice investors may be tempted to sell their investments and re-enter the market when they believe property values are on the rise. This can be problematic as it is difficult to predict the correct timing for these decisions, and as a result, these investors may end up “selling low and buying high”, which is the opposite of their desired outcome. This strategy can be detrimental to their long-term financial plans and may impede their progress towards achieving financial independence.

 

Relying on the wrong advice

You know the old saying when it comes to real estate “everybody is an expert”. And whilst everyone has an opinion on what they think is “going to happen”, the reality is that the property market is a complex and dynamic space, and to make the most of the opportunities it presents, it’s vital to seek guidance from experts who have decades of experience in the field. These experts have a comprehensive understanding of the market’s long-term patterns and can help you navigate the market with confidence, making the most of your investments and achieving your financial goals.

 

All information contained on this website is for your reference only. You should always make your own enquiries and seek independent legal advice in respect of any information about real estate law and the purchasing of real estate and related subjects. This website may contain hyperlinks to websites operated by parties other than Mercer & Cooper. Such hyperlinks are provided for reference only and Mercer & Cooper does not control such websites and is not responsible for their contents.

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