Looking to Buy a House in Australia?
One of the hottest topics currently in Australia is the Royal Commission promising a change to the real estate climate. While the financial institutions are being audited to take a closer look into their lending strategies, first home buyers with families are looking for an in, into buying their first property.
For the last 5 years it is has been a steady rise in property prices especially in Sydney. Families with genuine incomes have not been able to buy a property that is both affordable and safe for them to invest in. Thankfully, the real estate bubble has shown signs of slowing down over the last few months and everyone has been looking at how to jump on the wagon.
In conversation with Tisa Van Den Huevel, a real estate professional, CTM central gained some insightful information about the best time to buy a house in Sydney.
Tisa, Managing Director – In Home Property Management
“The best time to buy a house is 5 years ago” says Tisa. Everyone has been so caught up in finding the best time to buy a house that they don’t really get down to it. “If you have the finances and if you can afford to, then buy it” she says. Which proves to be right when it comes to most first home buyers. Over time, most renters end up spending a lot more on their rent.
“People get way to hooked up on the ‘right’ time. If you wait too long it gets away from you. Just be happy with what you get and make it your home (or investment, if that’s what you want)” says Tisa.
Why Do News Websites Say It Would Be Best To Buy End Of The Year?
“I think the thoughts behind this are that interest rates will go up. They are so low right now any change will make lots of people panic and people who are super stretched will be forced to sell. There is no magic bubble that will burst. This happens every 10 years or so that the market goes crazy.” says Tisa. News websites are trying to make news and sell more papers by telling people what they are desperate to hear. People who sell are the ones who cannot afford to keep it, or panic in a falling market.
“To me that is a false economy as you pay less for the house but more for the mortgage as the rates are higher.” Says Tisa.
Will Homes Become Affordable At All?
“My prediction is that they will come down a bit when the interest rates go up. They wont come down to where they were but maybe 10% or so. Then in 10 years or so they will double again. I have been in the game for 15 years. I have seen this happen twice. Once when I first started and again just recently. So it stands to reason it will happen again.” Says Tisa
This is why she says not to get too hung up about the right time to buy. Having bought a home a Kellyville 6 years ago, at $650K and 8.5% rate of Interest, she repaid roughly $1000 a week. Now the mortgage would be $500 per week but the house would cost over $1 million so it’s all relative.
“People need to realise what the interest rate really means. If your rate is 4% now then if it goes to 8% that is not a 4% increase, its a 50% increase, which means your mortgage repayment will double.” says Tisa
What Is The Royal Commission Mean for First Home Buyers?
The Royal Commission has been meticulously combing through the lending agencies since late 2017. This means it is definitely a chance for first home buyers to get into the market. The royal commission would ideally affect lenders and tighten their lending procedures, which means investors would be the first to be affected and will stop buying investment properties.
This also means that first home buyers would have a chance to buy property, as the investors, with their rental income behind them, are out of the picture.