With all of the data and research available in todays information age, why is it that our property economists are usually more wrong then right with their predictions?
It is because investing in the right property market is dictated by more then just technical analysis and an understanding of macro fundamentals (like employment, interest rates and supply). Market movements are not mechanical and easily forecasted. Pin pointing the correct market comes down to an understanding of the fundamentals that will create pressure on price movements in combination with an understanding of market sentiment.
Timing your entry into a property market is imperative to your profitability. Having a clear understanding of when a market is well positioned in the property cycle (in opportunity) will put you ahead of the property economists. Typically if market sentiment is very high in a market, it is because you have already missed out on the growth of that market, and it has moved further along in the cycle – therefore not investment worthy. It can be a very difficult concept to follow, but if you have a clear understanding of the market fundamentals, and where a market is positioned in the cycle, as Warren Buffet says himself we should “be fearful when others are greedy and to be greedy only when others are fearful.” This will see you entering the market before it is to late, and giving your property investment an ideal start.