As Bill Gates is quoted as saying, “Most people overestimate what can be achieved in one year and underestimate what they can achieve in ten years”.
When we relocated our relatively new business to the Melbourne eastern suburb of Burwood in 1999, we carefully looked at property values and potential fees as part of our business plan. Average values then were about $180,000. Fast forward 19 years and the cheapest house in the area will set you back about $1,000,000. Average prices across Melbourne are about 4 times higher than 20 years ago, whilst the Eastern suburbs in which we operate have increased to be about 5 times those prices.
If we had been asked what to invest in then or how much growth could be expected, we simply would not have predicted this. Year in and year out, doomsayers predict the imminent collapse of values (yes, we’re talking about you Harry) and of course there have been pauses and dips along the way. But stand back and look at the results over 10, 20 or even 40 years.
We aren’t arguing that this is a good thing and yes, we have children who struggle to enter the market too. But we can either complain how unfair life is and live a life of regret and lost opportunities or make the effort to tap into an astonishingly stable growth as evidenced by a very long history. When is the best time to enter the market? When you can. Will you get the timing right? Not unless you are simply lucky. Might prices soften after you buy? Of course. But when have I advised my own family to buy property? As soon as you possibly can.
10 years goes by in what seems like no time and if you want to know what your property might be worth in 10 years time, simply look at prices from 10 years ago (or possibly only 5 if you want to be conservative). Do you wish you’d bought then? Right now is the 10 years you’ll be looking back on in 10 years’ time. Don’t fall into life’s trap and become one of the “If only I had…” people that others feel sympathy for.
To compare prices from 1997 to 2017, click here