There is one question we hear over and over: “Is now a good time to buy?”
No one wants to buy at the wrong price at the wrong time. You want to feel secure and confident in your property choices, yet the constant discussion around rising property prices and rising interest rates and property market predictions can really make you second guess yourself. There’s a lot of money on the line!
You can never be 100% confident when the best time to buy will be. Think back to 2020 at the start of the Covid-19 pandemic. Top property experts and the major banks were convinced that the property market would crash off the back of such ‘unprecedented times’. They couldn’t have been more wrong.
With that in mind, there’s certainly some property trends you can keep an eye on. Watch the above video to get some insights from Inspire Realty founder Colin Lee.
Supply and demand
A hot topic in property is supply and demand. Many in Australia are concerned that not enough new homes are being built. As demand continues to grow at alarming rates, Australia is headed towards a housing supply crisis.
With a vacancy rate of just 0.5-0.6% rents are surging and it’s becoming clear that there is simply not enough dwellings. State and federal governments need to take a closer look at development planning laws and start to address this problem.
The last year of record-breaking house prices really all comes down to supply and demand. Boosting housing supply will make a big difference to housing affordability.
Impact of interest rates
The Reserve Bank of Australia’s decision on May 3 to raise interest rates has sent a wave of fear among homeowners and property investors. What will this mean?
It’s little surprise that ‘interest rate increase’ sends a shiver of fear down the spines of many Australians. We haven’t seen an interest rate increase in the last decade. Most first home buyers have no idea what the impact of rising interest rates means to them or the economy.
But rest assured that the recent increase is projected to only raise the average monthly mortgage repayment by $88. Sure, that’s not ideal, but in reality $88 is not going to make a big difference to most.
As an investor you always need to take into consideration the worst case scenario. But don’t count yourself out just yet. If you schedule a discovery session with us we can walk you through what is affordable for you even if interest rates continue to go up and up.
Timing the market is futile
So if you’re wondering “when is the best time to buy?” the short answer is: you can never be 100% sure. That’s why we encourage investors to take a longer term approach. The strategy should be ‘time in the market’, not ‘timing the market’.
The longer you’re in the market the better your chance of guaranteed returns. The median Australian home has grown in value by 6.8% per year over the past 25 years. Over that time period the property market has gone in cycles, we have seen it surge, plateau, and decline. But over the longer term the majority of houses have doubled in value in 10-15 years.
At Inspire Realty, we help our clients make confident property investment decisions for maximising capital growth and rental yield. Schedule a discovery session to find out how we can help you.
