However, the savvy property people see a declining market as the ideal time to upgrade to a better property and reap the rewards when the market bounces back.
Why is a declining market the perfect time to buy up or upgrade to a more expensive home? It’s simple, when a down shift in property prices hits a region or town, it usually doesn’t discriminate. This means that almost all suburbs, property types and price ranges get hit with a similar percentage shift in prices.
Lets say for example that your home was worth $450,000 at the peak, and the market drops 10%, your home is likely to be worth around $405,000, a drop of $45,000 or 10% of its value. A $650,000 home in the same market is also likely to see prices drop by 10%, meaning its value would decrease by $65,000 to around $585. This means that despite your home being worth less when you sold it, the properties you can upgrade to are likely to have far greater drops. So if you are in the position to buy up when the market is in decline, you are likely to be a big winner when the market bounces back…. And it always bounces back.
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