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Ben Kingsley Blog post by Ben Kingsley

Detecting a turning market

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In this episode of Real Estate Talk, Kevin Turner interviews Ben Kingsley and ask him about the signs he looks for to detect a turning market.

Here’s the transcript:

 

Kevin:  One of the things I find that a lot of investors do is spend a lot of time trying to pick the market – that is, trying to pick which markets are going to go and which markets are going to slow – and also those who try and determine where the market is turning from a seller’s market to a buyer’s market and vice versa. It’s one of those fascinating conversations. I’m going to have it now with Ben Kingsley, who’s the CEO and founder of Empower Wealth.

I don’t know about you, Ben, but one of the common questions I get asked is are we in a seller’s market or are we in a buyer’s market?

Ben:  Yes, that’s a great question. This is fundamental research basically. All of us as investors want to try to time the market when we can. I’m still very much an advocate of time in the market as the ultimate – a long-term investor will enjoy the peaks and troughs of a cycle – but in terms of trying to time the market, there is a science to it, and there are things you can look at.

Kevin:  Let’s have a look at what they might be. What would you suggest?

Ben:  If we’re in a seller’s market but we’re trying to determine whether it’s going to a buyer’s market, the early indicators for the big city markets – where options are involved – are usually a slowing down of clearance rates. Where we’re starting to see the appetite of the buyer is not as strong, so we’re starting to see properties passing, they’re the early indications.

When we’re looking at other markets where options aren’t the most prevalent way of selling – we’re actually talking about Brisbane, Adelaide, Perth, these types of markets – the indicators are days on market and stock on market. Once we start seeing the trend where the days on market is starting to push out, we can start to see that it’s now becoming either a balanced or a buyer’s market. They’re the best indicators.

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