Is this true? Falling property market versus rising market tip

[ohwell02]

I once heard this advice: When the market is falling buy upwards and when it is rising buy downwards. I wondered if there is any truth in this. This of course only applies to people on the housing ladder who are moving not to first time buyers?

It's just simple Maths really. If you need 200k extra to move up the ladder, and prices fall by 10%, you'll only need 180k.

If you're downsizing from a 500k to 200k house, that's 300k extra equity. If prices drop by 10% to 450k and 180k respectively, you'll be left with only 270k equity.

As a first time buyer, it really depends. You don't want to buy at the top of the market and risk negative equity, but equally it might not be worth paying rent whilst waiting for prices to drop. Equally, you don't want to miss the bottom price as when the market is rising again, you might struggle to keep up with it (with deposit savings and buyers competing for properties at that point in the cycle).