When is the best time to buy?
As a first home buyer you want to know when it’s the ‘right time’ to buy property. Unfortunately there’s no easy answer to this. But here are some of the things influencing the current state of the Australian housing market that are well taking into consideration.
The current economic outlook is ‘subdued’. The on-going financial crisis in the United States, combined with the perilous state of the European market continues to encourage caution. Although Australia hasn’t been badly affected by the GFC, people are still wary about their future employment prospects and are focused on paying off their mortgages. This has led to a slowing down in the housing market.
Household debt is the highest it’s been in 25 years. This means many people have reached the limits of their ability to borrow. The mining sector has also cooled down which has dampened the demand for housing in resource rich states like Western Australia. And although interest rates are at record lows, they haven’t translated into an increase in demand or a rise in small business investment. Government home buyer incentives have also decreased in the last few years and the population is ageing. Combined, this also slows the market.
According to Demographia, Australian housing prices are one of the highest in the developed world. However, bargains can still be found, you just need to do your homework. The best advice we can offer is to be informed about how the home buying process works before you dive in. Know how much you can borrow, how the home loan application process works and whether you’re truly prepared for the responsibility of a mortgage. Once you’ve got all that under control, look for properties you can afford and be patient. It’s better to take the time to find the right one for you than settling for second best.