Is now a good time to buy a house?

As Australians recover from the many unprecedented events of 2020, home buyers and investors are wanting to know whether now is a good time to buy property?  But the reality is, this question has many layers and there are many factors to consider when deciding to buy.  Individual goals, budgets, credit history, timeframes and circumstances should all contribute to your decision.  What is good for one, may be a disaster for another.

Obviously if you have suffered financially or your employment situation has been negatively impacted of late, then right now might not be the right time to buy.  But again, individual circumstances differ and there may still lay an opportunity.  If purchasing is not currently an option, there may be scope to restructure your finances to place you in a healthier position.

Alternatively, if you are in a secure position and have been saving those pennies, then record low interest rates offer a great opportunity to get into the market or increase your standing. With the RBA suggesting rates will hold steady at record low’s for some time yet, and the banks competing for your dollars, now is as good as ever to get into the market.

Positive market outlook

Even the big four banks have reversed their pessimistic outlook for 2021, with CBA, NAB, Westpac and ANZ all updating their housing market forecasts in the last month, suggesting the positive growth will continue.  Utilising data from Core Logic, economists for the big banks suggest dwelling prices will rise between 7-16% in the next two years in Australian capital cities and leading regional areas (source Commonwealth Bank of Australia 2021; NAB Behavioural & Industry Economics 2021; ANZ Research 2021; Core Logic).  Whilst certainty cannot be guaranteed in financial and property markets, the optimistic outlook from a generally pessimistic bunch of people is somewhat reassuring.

Where to buy?

Research, research, research!!

Again, there is no single strategy in deciding where to buy. Deciding when and where to buy your family home will vary greatly to your investment strategy.  But nevertheless, do your research on the property and suburb that you intend to buy in and match it with your goals.  For example, a flow-on effect from the pandemic indicates that now may not be the best time to be investing in inner-city apartment towers and student accommodation.

Suburbs that have enviable beaches, landmarks, parks, popular restaurants, transport and amenities, are going to provide longer term capital growth then a designer house in a less desirable neighbourhood.  Just remember, you can always renovate your house, but you can’t change the location of your property!!  So think about what you are wanting to achieve and where you are prepared to spend. As evidenced from the post-Covid lockdowns, Australians are rethinking what their world looks like, and what we are willing to prioritise and compromise.  Ensuring you know what you want from the property, and how much you are willing to pay for certain luxuries, will go a long way to determining what is right for you and your circumstance.

Clearly there is a theme here.

Your goals and your circumstances will drive what is best for you.  If you haven’t already, write down what you are wanting to achieve, your timeframes, look at your borrowing capacity and assess your circumstances.  Knowing what you want and how you plan to achieve it will go a long way to ensuring a successful investment.  You should also seek professional advice from people who have been referred by people you trust.  Getting the right advice can make all the difference.

After the manic year that was 2020, this new year offers opportunity, potential and growth.