Is now a good time to invest in property? I have been asked that every year since 1997, in good markets and bad. My answer has not changed. There is never a perfect time. In my experience, long-term results have more to do with time in the market than with trying to time it.
The fear never goes away. When the market is strong, the headlines say no one can afford a house. When it is weak, they say rates and inflation will sink everyone. Neither story helps you decide anything. It is not if there is a downturn, it is when, and what you do when it comes.
It happened to us
In 2008 we bought an investment property we planned to renovate and make our home. When the global financial crisis hit, the lender withdrew the building funds, so we let it to tenants instead. Within two years it was worth less than we paid. My wife was worried. I wasn't, because I comprehended what we owned and why we were holding it. We held on, renovated when we could, and we live in it today. It is worth far more than we paid.
Why values move both ways
Real estate is a long-term holding. In the short term, values and rents move both ways. The 2008 global financial crisis cut values for years in some places, and people who bought just before it could owe more than their property was worth. The COVID years ran the other way. In my experience both were exceptions to the long-run pattern, and both passed.
When rates rise
Rising rates raise the cost of holding, and in my experience that flows through to rents in time. The cash rate has risen four times this year, to 4.60 per cent in September. If you planned for rises before your first investment, they are uncomfortable. If you did not, they can force a sale at the worst time. That is why lenders test you at a higher rate than you pay, and why I ask people to know what they could carry before they start.
Emotion or knowledge
Anyone who promises a straight line up is not telling you the truth. What helps is knowing what you own and why, so fear, yours or a partner's, does not make the decision for you. Where knowledge is lacking, fear fills the gap.
Is now a good time to invest? What to ask first
- If values fell next year, would anything force you to sell?
- Could you carry the property if rates rose again and stayed up?
- Is there a cash buffer for a vacancy or a repair?
- Who will you talk to before you decide anything?
Holding through a fall only works if you can carry the property. The time to plan for a downturn is before your first investment, not during one.
Nicholas Lockhart
General information only. No advice is given. Rates as at 10 October 2026.