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When Should You Sell? Why This is the Wrong Question to Ask…

Updated: Dec 1, 2023

I get many letters from property investors wanting to know what to do with their property investments at the peak of the real estate cycle.


The question — ‘when should I sell? 2025 or 2026?’


No matter what stage of life you’re at, the answer will always depend on what kind of real estate you’re holding.


Even within the context of the boom/bust cycle — what you buy is far more important than trying to time the peak.


Let me explain. Back in 2007 — the peak of the last real estate cycle — a member at Prosper Australia was gearing up to sell his property.


He owned a nice suburban house in Melbourne’s middle-ring suburb of Glen Waverley.


I’ll call him David.


David was very familiar with the real estate cycle — he’d worked in real estate and researched it in detail.


He was set on selling out at the peak.


2007 was good timing. Melbourne’s property market was going berserk in 2007.


It was at the end of the ‘winner’s curse’ phase of the property cycle (2005–2007). (It’s named the winner’s curse because the winner’s success in securing a foot onto the mythological property ladder is about to become their curse.)


This phase of the cycle usually evidences itself in the final two years prior to the crash.

It’s the point at which the gap between reality and fantasy reaches its widest point.


A flipper’s paradise.


Buy a property now, sell a few months later, and you’ll still bag a profit.

David sold into the winner’s curse, and he got a great price!


Then 2008 hit with a vengeance.


I remember it clearly.


I was working as a buyer advocate at the time for a small family-owned business. The drop-off in buyers was instant.


We lost all our clients!


Multiple real estate agencies had to let staff go.


Sellers panicked.


And for a while there, it looked like we’d be plummeting into another property crash akin to the 1990s downturn. David was thanking his lucky stars that he sold when he did.


However, shoot forward two years and prices in Melbourne’s Glen Waverley hadn’t crashed. In fact, they had shot up by another 22% to a higher peak (2010)!

22% to a higher peak (2010) property prices

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