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  • Writer's pictureDiane Davidson

Is NOW the best time to buy a home?

Well, isn’t that the question on everyone’s mind?

There are various trains of thought and several scenarios at play currently and we will try to address these for you so that YOU can make a more informed decision as to whether now may in fact be the best time for your home purchase … or not.

Your stage of life and reason for contemplating a purchase, is very relevant for the market we are working in at present.

For example, if you are retired and merely wish to downsize a mortgage-free home that is now too big for your needs, it may be that if you can manage your current property until such time as the real estate market takes another upward swing, it may be more profitable for you long term, to wait it out.

As a buyer moving down the market, any downward adjustment is going to affect your net result adversely, just as a buyer moving up the market, is going to realise the more favourable net gain.

However, if the ten-year real estate cycle is to be relied upon, you need to be aware that your wait could be for another four to six years. Can you maintain your property and your finances for this period of time and might your desire to settle into something smaller and more comfortable be unsupportive of such a wait?

As a first home buyer your considerations are going to be much more complex and taking trusted, expert advice will be key for you.

That said, we ask you to consider the following:

If you are now or are soon to be, pre-approved, the bank is confident your savings history and repayment capacity is such that they are prepared to lend to you – now!

If, as seems likely, interest rates continue to climb, your bank is also likely to “re-rate” you and the $10,000 - $20,000 - $50,000 savings you had hoped to make by waiting for more price adjustments, actually means your borrowing power has declined by a greater amount than any savings you thought you would be making. In short, you may now be “out of the market”!

There is something to be said for getting onto the property ladder now and locking in the best interest rate you can and there are many tools to aid you in playing the odds as to when rates may rise and fall. Splitting your mortgage between terms is one such instrument your bank or mortgage broker might suggest employing. This offers you a bet both ways really!

Diane’s first home purchase was at an interest rate of 24% and none of us want, nor expect to see those levels again … but, never say never is a mantra we should all live by.

The last thing we’ll ask you to ponder is this, when you feel prices are at rock bottom … and good luck ascertaining where that might be because as real estate salespeople in the business 24/7, we are not equipped to pick it; will there be a home you actually like and want to buy, on the market for you at that time?

Remember, not everyone has to sell! Many will sit out a market they feel is not favourable to them, because they can! When YOU are ready, are you going to be trawling listings in areas you’d rather not live in? Will you be considering homes with more remedial or cosmetic upgrading than you are comfortable investing in … and will you have the extra funds available to address this?

There is definitely something to be said for getting a start. Ten years from now when all of this is a distant memory, it is likely your equity has risen with the future highs we will see again in the market.

Ask yourself this question, “do I stand to lose more or gain more, by making a buying decision today”? And therein lies your answer!


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