Why so many Australian property investors will hang on as the market falls

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Australian property owners are likely to hold on to their properties longer than they should in a declining market due to the fear of making a loss, new research suggests.

This will be particularly painful for highly leveraged investors who bought at the peak of the market with the expectation that prices would keep rising.

Research suggests investors will hold on to an asset for longer than they should out of fear of making a loss. Photo: Josh Robenstone

Dr Daniel Richards, lecturer of Wealth Management at RMIT University, in June’s Journal of Economic Psychology found investors often sold too early, or held on too long in a falling market due to feelings of regret. Although the research focused primarily on investors in the stock market, Dr Richards said the findings held true for property.

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