Is The Property (Investment) Market Going Down?

This is a question that never ceases to amaze me just how many times I am asked it.

I think before I answer it - I would rather show you how you can answer it for yourself - I should tell you about why the answer is not the most important thing.

There is something a lot more important than knowing the answer to that simple question.

If you had none of your own money at risk and a positive cashflow then surely the only problem with a market downturn is that, you have to hold and wait for the upturn. This as anyone who’s been in property for 30 years will tell you always happens. So in fact you're being forced to do the best thing you can in property ‘You're not waiting to buy, you’ve bought and are now waiting’ taken from one of Robert Kiyosaki’s great books.

This is very important, as this is closer to real Property Investing than what most amateur investor’s think.

So the average price today is £185,881. If it were to lose 17% over the next 3 years it would be £154,281. That would mean if it just went up by 10.41% per year that the houses true price now is actually £115,000. That means that the whole property market is overvalued by 38%. It’s down to you to work out where you think the market is.

I for one think, using the same formulas I used to work out that the market was 30-35% undervalue, is that the market is 4% undervalued currently with a 6% margin of error.

If you were me what would you be thinking when you heard such things as there is going to be a 17% market fall over the next 3 years. I’ll tell you what I think - I think these so called economists can carry on making predictions based on the feelings in their gut or misreading the figures their formulas are showing them. I will carry on using my mathematics to work out what’s going on.

My prediction is the average price of a property in Worthing in July 2008 will be £256,503 with a 6% margin of error that is a rise of 38%. Is that enough of a prediction for you!

So forget that lets say I’m wrong but to lose 17% over 3 years actually means losing 38%.

Sorry if I got a little complicated there but when you try and analyse where the property market is and where its going to be, a number of different factors have to be taken into account and most experts would say that I have not used enough factors. However, since doing this professionally I can’t remember ever getting it wrong.

I would like to think that you could now predict whether prices are going up or down. Hope you enjoyed my weird way of viewing things.



Article by UK Property Investment expert Andy Shaw.
You can learn more about Andy here: http://www.propertyinvestmentsecrets.co.uk/ and download 5 free chapters from his "shocking" new property investment book "Money For Nothing And Your Property For Free" here: http://www.propertyinvestmentsecrets.co.uk/offer/mfn.htm