Why buy in a fluctuating market
“Buy land,” Mark Twain famously said “…they’ve stopped making it.”
The long-term view of property remains strong in Australia. People like living here, so demand means that prices remain strong. State governments keep releasing land on city outskirts and developers keep building inner-urban skyrise units. It seems there’s an ever-ready market for property.
But if you’re trying to save for a home loan deposit and keeping a regular watch as property prices fluctuate, it’s hard to know when to take the plunge.
The answer is easy. If you plan to hold the property for the medium to long term, go now.
As soon as you have the deposit and savings you need, actively look for a suitable property. Buy when you can.
Pundits will speculate that the market could fall. Or it could stay the same. Or it could increase. But this is not a game. Your property purchase is a longer-term proposition. We can’t say with 100% certainty that a property will be worth more in 10 years than it is now. But we can say that 200 years of property history in Australia would suggest it’s a reasonable assumption.
We’ve been trained to think of a home purchase as an investment. It is that, but it’s way more important than a simple financial investment. It’s an investment in security, wealth-building, family and happiness.
Property has been in rare air over the past 40 years. There have been fluctuations, drops and minor crashes, but on the whole, it’s stood up.
If you bought a property 3 years ago, or longer, odds on it’s worth a fair bit more now.
The property market might not always go up month by month. But the Australian regulatory system means that we’re not about to experience a low-doc GFC-style meltdown, like the US a decade ago.
And even if prices are flat, it’s patchy. Some suburbs keep booming (especially the ones that used to be more affordable).
In short, despite the recent slowdown in the property market (driven by higher interest rates) now remains a good time to buy. There’s a temptation to wait until the market ‘bottoms out’, but nobody knows when that will be. And when it springs back, history suggests it’ll spring back fast.
Imagine what will happen to prices when everyone decides at the same time that the market is ripe to snare a bargain. We believe another property value increase isn’t too far away.
The property market goes up and down, just like shares, currency and petrol. Our advice is (almost always) to get in while you can. In more than two decades advising on and facilitating mortgages, this advice has never been wrong. If you’re looking for short-term growth, property is not for you. If you’re looking to find a residential or investment property to hang on to for a while, we can help.
Contact Mortgage Broker Melbourne today. We can help you get your finances and paperwork in order, assess properties you might be looking at, research different loans that suit your circumstances, and even help lodge loan applications.
We can sometimes even access loan deals that aren’t advertised by lenders, and we have a legal obligation to always work in your best interests. Best of all, our service attracts no charge to you. Ever.
Sounds too good to be true? It isn’t. With Mortgage Broker Melbourne you get no-strings-attached home loan guidance. Call on our 20+ years of Melbourne loan experience.
Marc has been a professional lender for 28 years. After beginning his career in 1990 with a UK Building Society, he moved to Australia where he held several different retail banking roles. In 1999 it became clear to him that a mortgage broker would eventually become an obvious choice for someone looking for a home loan so he took the plunge and became an independent broker. He hasn’t looked back since!