Why a falling market isn't necessarily a Buyer's market

You've probably read that property prices are no longer rising at the same rate as they have been and that a period of plateauing or falling property prices is on the cards.

Traditionally, a falling market has been called a "Buyer's Market". However I'm not sure that I agree with this concept. Here's why.

1. The amount you need to be spend to move may be exactly the same.

If you are selling a house in order to buy a house, it doesn't really matter if prices are rising or falling as they tend to keep the same relationship to each other. eg. if your house is worth €600,000 in a rising market and your budget is to spend €900,000 on your new home, then the amount you'll need to spend to cover the difference is €300,000. In a falling market, you might only get €500,000 for your house but you'll most likely only need to spend €800,000 on your next one, so the amount you'll need to spend to bridge the gap remains the same eg. €300,000.

2. It can feel scary to buy in a falling market

It's not exactly reassuring to buy a property in a falling market because the chances are, the property you buy will be worth less next year or even next month.

Here are some thoughts to help you as you buy in a changing or falling market.

1.If it's going to be your home for 8 - 12 years, it's likely you'll be able to sell it for a higher price than you paid.

If you plan to live in the property for the foreseeable future or at least for 8 - 12 years, the chances are you'll sell it again for more than you paid. Irish property prices, unlike other European markets, tend to be volatile always going up or going down, rarely staying level. So even though you may see the value of your home drop considerably in the short term, it's likely to rise again to at least the same level you paid if not more over an 8 - 12 year period.

2. Don't think that everyone else is getting it right

For whatever reason, we all tend to put ourselves under huge pressure to "get it right" when it comes to buying property. By "getting it right", I mean, to buy at the lowest possible point of a property market price cycle ( and sell at the highest). We can be tempted to think that everyone else is doing smart things with property. This kind of "everyone else is doing something right" thinking probably led a lot of people into borrowing money during the boom to buy investment property on the basis that everyone else was doing it. So my advice, is think for yourself, don't act out of fear of missing out or a need to be "get it right". The only thing you need to get right is that you buy a home that meets your needs, in an area that suits you at a price you can afford.

3.There is no objective "good time to buy" in my view.

One question I'm often asked is " Is this a good time to buy?". This question supposes that there is in fact an objectively good time to buy eg. the lowest point of the market. The only time we can actually see the lowest point of the market is in the rear view mirror, after prices have started to rise again. So nobody at all can say when that lowest point is, until it is past. My view is that if you are buying a home for your own use rather than for investment, it makes sense to focus on your own needs, your own wishes and your own finances and don't overthink the market.