In recent weeks, the mood across the country has started to wane as national property prices have finally started to fall away.

With interest rates rising, home buyers have been taking a more cautious approach, and that has seen the number of sales dropping and inventory rising.

While the market has only seen a small fall in values, with sentiment low, many people are sitting on the side lines waiting. However, this could prove to be the wrong move.

Here are 3 reasons not to turn your back on property investment.

Not all locations are equal

Most property investors would know that Australia is not just one large property market. There are tens of thousand of smaller property markets that all perform very differently. We even see different areas of the same suburb that perform differently, there can even be more demand for one side of a certain street compared to the other.

While there are likely some areas of the country that are going to see weakness in prices, that's likely not going to be the case for all of them. There are always going to be locations that have a supply and demand imbalance that will be putting upward pressure on prices, regardless of the overall market conditions. 

Locations that normally perform well in any stage of the cycle are areas that are within good school catchments or suburbs that have the ability to subdivide or develop, as well as areas that are currently seeing large infrastructure spending, upgraded amenities or stronger job creation. 

These are fundamental factors that lead buyers to want to be in specific areas, and if supply is low then that will continue to put upward pressure on prices. 

Time in the market

While it might seem like property prices go through boom and bust cycles, the reality is that values go up far more than they fall during each cycle.

New data from Domain shows that on average, the duration and price growth tend to be greater for an upswing, seeing house prices rise 32.7% from the point of price trough to peak, and spanning 2.75 years.

Meanwhile, on average, downturns have seen house prices decline 3.0% from the point of price peak to trough, spanning 0.75 years.

The study found that it was far more important to spend time in the market, rather than trying to time the top and bottom of the cycles. While some buyers are sitting and waiting for prices to return to where they were prior to 2020, the data shows that this is unlikely to happen.

Negotiate

One of the hallmarks of the past few years has been just how tight the overall level of supply has been. Anyone active in the market over the last 12 months in particular, can probably attest to just how hard it has been to secure a property with virtually all homes selling quickly with multiple offers. 

As an investor, this is a difficult environment to operate in. You need to work quickly and have little room to negotiate.

Now that listings are starting to increase once again, that is giving homebuyers more choice, and putting them back in the drivers seat. If you're looking to invest in the long term, then you can potentially find yourself a far higher quality asset when there is less competition, and pay a lot less for it than you would if you were competing with multiple other buyers. 

As soon as the media headlines turn around, buyers will again start to come out and you'll be facing stiff competition.