Week 4

Real Estate 1

After reading sectors about property investment in Paul’s book, lots of thoughts came into my mind. I always pay attention to China’s real estate. During 2009, there was a dramatic growth in real estate, in terms of prices and amount of homes were sold. What I would like to talk about in this journal is how to grab the right moment to invest in property.

There is a common sense that we buy things when the price is low and sell things when price is high. However, in real estate investment, people always buy in when price is growing and sell out when price is declining. This situation is generated due to psycological effect rather than refering to the rational analysis. Investor are used to expect a continous and faster growth in price when the price is already climbing. However, the fact is if you invest in this moment, your possible benefits getting from price increase is actually been pressed down. Even worse, there always a bubble comes after dramatic increase in price. In my opinion, the right moment of investing is when the price is declining, investor need to consider the market fluctuation, if currently, the price in at the bottom, when the next wave comes, the prices will be brought to the top.

Personally, I think investors always have to fight againest their own, get rid of psycological impact, have brave heart, find out the truth of the market.