Should You Buy Now?

With the ups and downs of the property market, investors and homebuyers often wonder when the right time to buy really is. While everyone wants to pick the bottom of the market, there are several factors that you should consider before waiting for prices to fall.

‍

Borrowing capacity

‍One of the biggest factors that impact property prices is interest rates. The last property boom was helped on by the Reserve Bank of Australia slashing the cash rate to a record low 0.1% This meant that mortgage rates were around 2%, so homebuyers could borrow more money based on their level of income. Many buyers took this opportunity to purchase, and demand was at record levels. However, prices were also equally high. Now that interest rates have risen, prices in many areas have declined, but at the same time, borrowing capacity has also fallen. So, while prices might not be as high as they were, it might even be more difficult to buy because of the impact on borrowers' serviceability.

‍

Local prices

‍While the media regularly reports what's happening with home prices on a national or even state level, prices don't all move in the same way. There are often wide variations in prices across different areas and even inside suburbs. You probably know that some streets are more appealing than others, and that can change how prices move. There are also other factors that impact local levels like zoning changes or new infrastructure projects taking place. While national prices might be falling, on a local level, prices could be moving higher.

‍

‍Personal circumstances

‍When you're trying to buy a property, one of the biggest factors is always going to be your borrowing capacity. This can change a lot depending on your work situation and your family life. Unless you have a very stable job, borrowing capacity will vary, so it can often be better to buy when you have the financial means and the serviceability to do so. That's especially true if you are looking for an owner-occupier home, as finding a place for your family is usually the main factor driving the decision to buy. Normally, the best time to buy is when you can afford to, and are in a strong enough financial position to hold onto your property for the long term.