The right time to buy a property - In a market such as that for residential and investment properties, good timing is often crucial. Basic orientation is provided by the Real estate cycle - a model that describes the typical upswing and downswing phases of a real estate market. Anyone who understands the cycle and recognizes when in the course of the The right time to buy a property can make better purchasing decisions and limit risks.
What does "real estate cycle" actually mean?
The real estate cycle describes the recurring phases in which supply, demand, prices and construction activity vary. Synonymous terms include "market cycle", "residential real estate cycle" or "location life cycle". These models help to identify long-term trends and temporary over- or undervaluations - and thus the the right time to buy real estate to identify.
Checklist: Recognize market phases
| Feature | Reference to phase |
| Falling prices | Downturn / transition |
| Low construction activity | Low phase / recovery |
| Many new construction projects | Peak phase |
| Pessimistic media reports | Transition to undervaluation |
| Rising rents with stagnating prices | Early phase |
The four phases of the real estate cycle at a glance
- Recovery (early phase): Prices still low, supply limited, first investors active
- Expansion (growth phase): Demand is rising, prices are increasing, new buildings are being built
- High phase (boom / overheating): Overvaluation, many projects, supply overhang possible
- Decline (downturn): Prices fall, demand weaker, construction activity slows down
Checklist: Determine phase based on market indicators
| Phase | Typical features |
| Recreation | Low prices, little new construction, weak media coverage |
| Expansion | Increasing construction activity, rising rents, more investors |
| Peak phase | Many projects, above-average prices, euphoria |
| Decrease | Falling prices, longer marketing times, project halts |
More on current developments on the domestic market can be read in the articles on the Salzburg real estate market and Vienna real estate market
Real estate clock: The classic for assessing market phases
The Real estate clock assigns the four cycle phases to a time and is often used for orientation in the real estate industry. It was first used by Jones Lang LaSalle (JLL) to position real estate markets worldwide in a comparable manner. The times are meant metaphorically - they do not show real time, but symbolize cyclical market phases
Assignment of times
| Time | Phase | Description/Strategy |
| 12-1 p.m. | Overheating | Overvaluation, maximum prices, time of sale |
| 2-3 o'clock | Downturn begins | First declines, supply exceeds demand |
| 4-5 o'clock | Decrease | Prices fall, market sentiment negative |
| 6-7 o'clock | Low phase | Low prices, ideal time for anti-cyclical buying |
| 8-9 a.m. | Recovery begins | Demand increases slowly, market stabilizes |
| 10-11 a.m. | Upswing / boom | Rising prices, new projects, broad demand |
Practical tip: Buying in the 5 a.m. to 7 a.m. window is often seen as an ideal entry point into up-and-coming markets. Current figures on vacancy rates, construction activity and real estate prices can be found at Statistics Austria
Wave model: Fluctuations as an investment opportunity
The Wave model is based on the assumption that real estate prices do not move in a linear fashion, but in waves - with regular peaks and troughs. The origins of this model can be traced back to economic cycle theories, in particular the work of economists such as Homer Hoyt ("100 Years of Land Values in Chicago", 1933), who identified cyclical patterns in urban real estate markets. The model was later developed further in real estate economics.
Checklist: Using waves sensibly
| Cycle position | Features | Strategy |
| Wave valley | Prices at rock bottom, bad mood | Buy, think long-term |
| Rising wave | Demand picks up, slight price increase | Entry phase, selective buying |
| Wave height | Top prices, strong media interest | Caution, sell if necessary |
| Descending wave | Prices fall, selling pressure increases | Wait and see or analyze specifically |
How do you recognize undervalued properties?
Undervalued properties are properties whose current market price is below their realistic value in other words, below what they would actually be worth due to their location, substance, rental income or development potential. Recognizing such opportunities requires a good feel for market mechanisms, but also a few typical pointers.
Typical reasons for undervaluations
- Personal circumstances of the seller: Inheritances, divorces or a rapid need for liquidity can lead to properties being offered at significantly below market price.
- Time pressure when selling: When sellers need capital quickly, price reductions are common.
- Need for refurbishment: Many buyers are put off by renovation or modernization work, but this often only reduces the price in the short term.
- Missing or poor online presentation: Poor photos, unclear floor plans or brief descriptions lead to low demand - and thus to price advantages for attentive buyers.
- Location with development potential: Neighborhoods with new infrastructure projects, educational facilities or transport links often offer hidden potential for value appreciation.
- Unresolved legal aspects: Unresolved issues such as parcelling, utility value appraisals or old easements can depress the price - if these are clarified, the market value increases.
Further indications of undervaluation
- Price is well below the regional average
- Longer Marketing period despite good location
- Low rents compared to the purchase price (below-average rental yield)
- Solid building fabric despite unfavorable presentation
Practical tip
Many undervalued properties fall not through advertising pricesbut through Details in exposés or Sales behavior on. Anyone who regularly monitors market data will recognize deviations more quickly. Whether real estate prices are overvalued or undervalued is shown by the fundamental price indicator of the Austrian National Bank.
Tools & indicators for market analysis
These tools help to understand data structure and market dynamics:
Checklist: Check this data before buying real estate
| Tool / Indicator | Purpose / Benefit |
| Price-rent ratio | Assessment of profitability |
| Real estate price index | Assessment of price trends |
| Vacancy data | Estimate supply / demand |
| New construction activity | Recognizing the risk of oversupply |
| Interest rate level / financing conditions | Check affordability and anticipate future demand |
Psychology & strategy: Why many buy too late
A common mistake: purchasing decisions are only made when strong media reports about price increases appear - often in the middle of a boom. This Herd behavior leads to buyers missing the optimal time.
Strategically wiser: enter in phases with pessimistic sentiment but solid fundamentals. This is because late phases are usually considered expensive - anti-cyclical thinking can pay off.
Checklist: Avoid emotional traps
| Behavior | Risk | Better strategy |
| Herd behavior | Purchase too late, too expensive | Early market observation |
| Media influences | Orientation towards hypes | Focus on fundamentals |
| Fear of missing out | Quick shots without analysis | Stay patient, make targeted investments |
| Security overrated | Only established locations wanted | Anticyclical testing in peripheral locations |
Key takeaways - The right time to buy a property
- Real estate markets are cyclical - understand the 4 phases
- The real estate clock helps with timing - Origin at JLL
- The The right time to buy a property depends heavily on the local market
- Wave model and fundamental analysis offer deeper insights
- Use data such as price index, vacancy rate or interest rate level
- Emotions often lead to wrong timing - focus on strategy
Conclusion: Knowledge is your strongest lever
If you know the real estate cycle and take local characteristics into account, you can minimize risks and make targeted use of opportunities. Regardless of whether you are an owner-occupier or an investor - the the right time to buy your property is a strategic decision, not a coincidence.
Secure advice now
Kroy Real Estate supports you with market knowledge, tools and experience. We analyze regional cycles for you, evaluate properties and accompany you through to the optimal purchase decision. Arrange a free consultation today! Click here for the Contact us.
FAQ - Frequently asked questions and answers
How often does a real estate cycle repeat itself?
As a rule, a complete cycle lasts 7-15 years - depending on the region, economic situation and supply.
Can the peak be precisely determined?
No - but tools such as the real estate clock or price-to-rent ratios are a good way of estimating a turning area.
When is buying particularly sensible?
In early phases (recovery / upswing) - prices are lower and the prospects for value appreciation are high.
Which tools are useful for private investors?
Fundamental data such as price index, vacancy rate data, interest rates and rental yields are key indicators.
Can bad timing always be avoided?
Not necessarily. A purchase can also make sense during peak periods - for example, for owner-occupation or a strategic choice of location.
