The average price of a property in Australia is continuing to rise. Despite a series of market disturbances and global issues, there doesn’t appear to be any sign of this trend stopping in the near future.
For anyone looking to get on the property ladder, this is depressing news. The average age to buy a first home is already 36, if prices continue to rise, so will this age, ultimately creating an entire generation that rents instead of buying.
Of course, there are several competitions that can help. For example, the home lottery offered by Surf Life Saving Foundation actually allows you to win a beachside house. It’s worth trying because someone has to win and while trying you are at least supporting their lifesaving work.
Now Is The Better Time
It is always possible to be cautious and hope that things will change, perhaps that the market will drop suddenly and allow you to grab a bargain. However, for the housing market to crash there would have to be other variables involved, such as high inflation and increased unemployment. If these things happen then it is possible that you will no longer be in a position to buy.
Naturally, a price crash would allow you to buy property at less than it is currently worth. However, there is no guarantee that the prices will bounce back and may leave you with a property worth less than you paid for it.
While this can happen at any time, right now the prices are steadily rising. That means investing now will allow you to start building equity in the property, effectively cushioning you against any unexpected price drops.
Interest Rate Rises
Inflation has been steadily rising in recent months, as a result of various global events and tensions in world economies. As a result, many governments, including the Australian one, have increased interest rates. The aim is to cool markets, effectively preventing prices from increasing further. If this measure works then it is possible your money would go further next year and waiting would be a good idea.
However, the reality is that the interest rate rises push up interest rates on loans and mortgages. At the same time savers earn more interest. The result is property owners feel better off and are able to hold out for the right price. While a reduced number of buyers should make it a buyer’s market and force prices down, the reality is homeowners will be content to wait for the right buyer. This means it remains a seller’s market.
The Bottom Line
Getting on the market is difficult at any time. However, if you are confident that you have the deposit and can afford the monthly mortgage payments then there is likely to be little benefit in waiting. The bottom line is that buying a home is a personal decision and you need to do what feels right for you.
But, remember, the long-term trend is for prices to increase. If you can get on the market you will benefit in the long term.