\nOne of the things I find that a lot of investors do is spend a lot of time trying to pick the market \u2013 that is, trying to pick which markets are going to go and which markets are going to slow \u2013 and also those who try and determine where the market is turning from a seller\u2019s market to a buyer\u2019s market and vice versa.\u00a0In today’s show\u00a0<\/b>we talk with Ben Kingsley<\/b>, from Empower Wealth,\u00a0<\/b>about the signs he looks for to detect a turning market.
\n <\/p>\nTranscript:<\/h4>\n
Kevin:\u00a0 <\/b>One of the things I find that a lot of investors do is spend a lot of time trying to pick the market \u2013 that is, trying to pick which markets are going to go and which markets are going to slow \u2013 and also those who try and determine where the market is turning from a seller\u2019s market to a buyer\u2019s market and vice versa. It\u2019s one of those fascinating conversations. I\u2019m going to have it now with Ben Kingsley, who\u2019s the CEO and founder of Empower Wealth.
\nI don\u2019t know about you, Ben, but one of the common questions I get asked is are we in a seller\u2019s market or are we in a buyer\u2019s market?
\nBen:\u00a0 <\/b>Yes, that\u2019s a great question. This is fundamental research basically. All of us as investors want to try to time the market when we can. I\u2019m still very much an advocate of time in the market as the ultimate \u2013 a long-term investor will enjoy the peaks and troughs of a cycle \u2013 but in terms of trying to time the market, there is a science to it, and there are things you can look at.
\nKevin:\u00a0 <\/b>Let\u2019s have a look at what they might be. What would you suggest?
\nBen:\u00a0 <\/b>If we\u2019re in a seller\u2019s market but we\u2019re trying to determine whether it\u2019s going to a buyer\u2019s market, the early indicators for the big city markets \u2013 where options are involved \u2013 are usually a slowing down of clearance rates. Where we\u2019re starting to see the appetite of the buyer is not as strong, so we\u2019re starting to see properties passing, they\u2019re the early indications.
\nWhen we\u2019re looking at other markets where options aren\u2019t the most prevalent way of selling \u2013 we\u2019re actually talking about Brisbane, Adelaide, Perth, these types of markets \u2013 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\u2019s now becoming either a balanced or a buyer\u2019s market. They\u2019re the best indicators.
\nKevin:\u00a0 <\/b>Days on market, of course, from the point of listing to the point of sale?
\nBen:\u00a0 <\/b>Correct. That\u2019s right. Ultimately that\u2019s the only way we can track it, because we\u2019re relying on the data from the likes of Domain to provide that information that we can capture, and then we\u2019re seeing how many days the property has been on the market. Then the stock of market is obviously the concentration of that particular stock in that localized area. Usually we like to think of it as a local government <\/b>area; just to isolate it to one suburb, there\u2019s not enough data to make a trend or see the analysis work for us.
\nKevin:\u00a0 <\/b>What is the turning point in days on market from where buyers have control to where sellers have control?
\nBen:\u00a0 <\/b>That\u2019s a wonderful question, Kevin. I think it\u2019s different in each market. In some cases, if I\u2019m researching a new market, I\u2019ll actually talk to a couple of local agents in the area. The rule of thumb \u2013 roughly \u2013 is between 45 to 60 days. Certainly, 45 days, we\u2019ve been up for sale for six weeks. We\u2019re now getting feedback from our agent in terms of are we meeting the market with our price point, and is there\u2019s ongoing inquiry? It\u2019s been up on the website for a while. It\u2019s not getting the same open-for-inspection and interest that it was. That\u2019s what I would look at in a city market.
\nRegionally, it can be even longer. In some regional centers that indicator can be 120 days, because in reality, unless there\u2019s some major economic activity that\u2019s attracting new arrivals to the area for employment opportunities, we normally see that properties in those areas take a while to sell.
\nKevin:\u00a0 <\/b>Ben, I want to thank you very much for your time. It\u2019s been a great insight there as to the indicators to look for, and certainly days-on-market is one of those.
\nJust before we go, I just want to make one comment to see if you agree with this about auctions and how much of an influence that has had over days on market, where we see agents who want to take the property all the way through to auction, like a 30- or a 40-day campaign. That\u2019s certainly going to have an impact on days on market.
\nBen:\u00a0 <\/b>It is. Usually, in a really hot market, four weeks is enough for the marketing campaign. In most markets, we usually rely on four to six weeks from a selling cycle. That\u2019s enough time to get the board up, get it listed, open it up four times and maybe a couple of evenings. Then if we have enough interest there, what we\u2019re going to see is you\u2019d be crazy as a vendor not to take it to market \u2013 because that\u2019s when you get the emotional result, which is usually an outperform result, as opposed to a private treaty sale, where usually the expectation of the buyer is the price is made and then it\u2019s a discount off that selling price.
\nKevin:\u00a0 <\/b>Great talking to you, Ben Kingsley, CEO and founder of Empower Wealth. Thanks, mate.
\nBen:\u00a0 <\/b>Thanks, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"
One of the things I find that a lot of investors do is spend a lot of time trying to pick the market \u2013 that is, trying to pick which markets are going to go and which markets are going to slow \u2013 and…<\/p>\n","protected":false},"author":176692471,"featured_media":4385,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[10,25],"tags":[101],"class_list":["post-4383","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-sponsored-channels","tag-podcast"],"yoast_head":"\n