There is no doubt that the landscape of the economy has changed significantly over the past few years. Between the ups and downs, you might be feeling a bit of whiplash!
But here’s some good news; according to CoreLogic’s August 2019 report, the property market is showing a stabilisation with five out of the eight capital cities showing a slight increase in housing values.
Have we reached the floor of the property market downturn? It’s hard to say. But an increase in access to credit and lower mortgage rates, coupled with better market sentiment following the state election earlier this year are likely the driving factors.
Additionally, increased demand for housing due to affordability and a reduction in property supply may also be contributing to the turnaround in the housing market economy.
But the reality is that we don’t know how the market will behave in this economic climate. With RBA interest rates at historic lows, global trade tension (particularly between the US and China), and uncertainty about the direction of the property market, it is difficult to try and time the market.
It’s tempting to buy into media hype about the state of the economy and listen to property “gurus” telling when to purchase, but the truth of the matter is that the best time to buy property is when you’re in a position to support your decision.
If there is one thing you should get from this article, it that you should only purchase when you’re well and truly ready. Your financial and personal situations must be in line before you decide to purchase.
Consider your current financial position, and then think about how it would be affected by potential emergency costs that might be incurred. Are you planning on taking maternity leave or paying off debt? How stable is your job? Do you know how much home repairs might cost?
You should probably budget in a couple of interest rate rises and ensure you would still be able to make your mortgage repayments.
If you’re not personally or financially able, there is a high likelihood that your purchase could end up a disaster!
Once you’ve carefully evaluated your situation, focus on the fundamentals. If you’re purchasing your family home or investment property, you shouldn’t stress too much about the state of the housing market. As long as you know you’re in a secure financial situation and the purchase is a long-term investment, you will be able to weather the fluctuations of the economy.
Don’t like short-term concerns influence your long-term investment decisions.
At the end of the day, you need to make the decision that is going to benefit your long-term goals. You don’t need to make a massive purchasing decision today. Take some time to reflect on your personal goals, your family’s goals, and your budgeting system to better understand if you’re ready to make your first purchase.
If you’re ready to take the next step in the home buying process, see whether buying an existing home or constructing a new home is the best fit for you!