The answer to the million-dollar property question…
Buying a property, especially if you’re entering the property market for the first time, is one of the most significant decisions you’ll make in your life. So, it’s only natural that people come with many questions. And everyone always asks, “When is the perfect time to buy?”
This is literally the million-dollar question in most cases!
With the rise and fall of the market, ‘timing the market’ has become a hot topic of conversation. People always say you shouldn’t talk about money, politics or religion amongst friends, but I think the property market should be added to that list. Naturally, everyone from your friends and family to the local butcher or your hairdresser will have an opinion on when you should buy. Unfortunately, their opinion is usually clouded with a lot of unhelpful bias.
More often than not, the right time to buy is as soon as you can afford to buy the right property for you. Waiting until that crash that everyone’s talking about is just wishful thinking. Here’s why…
What goes up doesn’t always come down
If you look at the property market's recent history, there have undoubtedly been peaks and troughs in house values. However, over the average time an Australian will own their property, the falls have never been significant enough to wipe out the overall growth in value.
This means that if you’re waiting for a dip in values to score a bargain, you’re probably waiting for something that’s never coming. You’ll also be missing out on a year or more that your property would have increased in value if you hadn't decided to wait.
Higher interest rates don’t always equal lower property prices
The significant drop in interest rates gave a lot of people the chance to enter the market and saw a massive jump in values. There’s a lot of talk that when interest rates rise, property values will drop because of decreased demand.
However, even if you wait, you’ll still have to lock in a higher interest rate. When you compare the increased interest rate to the likely drop in property values, the numbers don't work in your favour. Whatever correction the banks and economists are predicting will not wipe out the growth in property value.
Beware of the bargains
Nine times out of ten, any property that seems too good to be true will be! If a property looks to be a bargain compared to the rest of the market, you best believe there’s a reason for it. Whether it’s issues with the property, services in the area, or even planned construction or zoning changes, you need to consider the complete picture and look beyond scoring a great price.
Property is supposed to be a long term investment
Even though the market can move incredibly quickly, buying a house or apartment isn’t supposed to be a get rich quick scheme. Most people will own their property for at least five to seven years, which leaves a lot of time for things to change.
You can still be smart about finding a property that works for your budget and presents a great investment opportunity, but it’s more important to focus your search on what you want to buy, not when to buy.
Cutting through the distracting noise surrounding the property market is what my team and I do best. We want to help you get the right property that works for your lifestyle, your budget and long-term plans. So, please get in touch if you need help focusing your search.