When is the right time to buy a house?
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For most Australians, owning property is high on life’s list of priorities, but when is the right stage to take the plunge?

Deciding on the right time to buy a house is a big decision at the best of times. Now, amid the worldwide COVID-19 pandemic, this adds more complexity when trying to figure out when is best to look to buy.

Although interest rates might be low and people are still buying, with uncertainty about economies across the globe and when it comes to job security, it will pay to proceed with extra caution right now.

We spoke to Michelle May, a Sydney-based property flipper-turned-buyers’ agent, and here are the things to consider when you’re trying to figure out when it’s the best time to buy house.

10 Linsey Street Coburg, Vic 3058

1. Understand COVID-19 and its impact on the economy

While COVID-19 doesn’t mean that you shouldn’t buy a house right now, it does mean that you should proceed with caution and there are extra things you need to take into account.

Have a look at what the economy is doing and consider how it’s projected to impact the economy both now and in the future.

If you’re unsure, it’s a good idea to speak to a financial advisor who will be able to look at your unique situation and talk you through the options.

2. Consider your income now and in the future

A history of a stable, regular income, with the prospect of the same in the future is a must-have when you are looking to buy a house.

May says without it, the banks simply won’t lend to you, or (they will, but) at a much higher rate than desirable.

3. Growing family

The imminent arrival of children can have a big impact on buying desire. “(It’s about) the need to create that family home for their child, where memories are made and pictures are hung on the wall.”

plants in baby nursery

4. Don’t try to predict the market…

Never choose to buy because of what someone says, which may or may not happen with the market.

“Even the experts cannot agree on what is going to happen and trying to predict the bottom of the market is a waste of time. This is about buying your home,” May says.

“If you are ready to buy, then buy today, as having your own home is a long-term exercise and any short-term rises and dips in the market really don’t matter. If you find the right place, do your research and buy it.”

May says the most important factors for potential buyers to consider are their ability to actually pay a mortgage and a willingness to compromise, which is almost always required.

“Be realistic and honest with your budget; not giving your broker the full picture of your lifestyle habits and expenses will only come back to bite you, as you will end up eating baked beans for the next 20 years. No home ownership is worth that.

“It’s usually the case that your rent can afford you a nicer and bigger place than your mortgage will. This is sometimes a hard pill to swallow for people who first enter the market to buy.”

So, be prepared to concede on some things.

143/19 Tusculum Street Potts Point NSW 2011

While every buyer and situation is different, May offers advice for people at different life stages, from single millennial to retirees.

For the single millennial

May says the sooner you can get on the property ladder, the better, as it can set you up for life. Her advice is to go at it alone if you are in a stable job and you can perhaps get help from your family.

“Every dollar you sink into your property now will reward you in the future, and while it may sound boring and responsible, if you are a person wanting a family for the future, you will probably never have as much free time or free cash as when you do prior to having kids.

“And even if having a family is not your chosen path, your property can become your retirement fund and allow you to retire earlier. Not a bad thought!” she says.

For the couple buying a first home

Be conservative and go for quality rather than quantity.

“If you have to choose between a house on a main road or a townhouse in a quality street, I would choose the townhouse, as they will perform better in terms of capital growth and will give you more options for the future if you decide to upsize,” May says.

Also carefully consider the impact of losing one income if kids are part of the plan.

moving in

For the retiree

Being a retiree means borrowing from a bank will be restricted and you will probably only be able to use the money from your last property sale, May advises.

“In which case, I’d say, enjoy it! Buy what you want, but think about the fact that this property needs to also work for you when you are perhaps less mobile,” she says. Think about strata levies too.


Reference:- www.realestate.com.au


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