BUY NOW OR WAIT?

When is the right time to buy?

Buying a house has been the great Australian dream for generations, however for those not yet on the property ladder, today’s environment has made them even more cautious about just when is the right time to purchase property.

While there has been increasing focus on those with mortgages, and those who are under stress, it is now more important than ever that potential home owners understand how much they can afford to spend on a home, and how any future movements in interest rates will affect their ability to repay a mortgage.

On the other hand, sluggish house price growth across many states over the past few years has meant that the dream home first viewed two years ago, may still be affordable today. In some areas, the Australian property market has recently gone through an adjustment period after many years of record growth, and house prices are now beginning to increase slowly across many states. Opportunities may present themselves in today’s market to those who have saved a small deposit and are ready to jump onto the ladder.

The right time to buy depends on a wide range of individual circumstances, including the property growth rate of the area in which you want to buy, your ability to meet regular mortgage repayments and your ability to save.

All potential homebuyers are able to use a number of resources to empower themselves with knowledge to make as informed a decision as possible. The internet provides a wealth of information on potential locations, costs involved in the home buying process and advice on budgeting. Such information can help you understand how much you can afford to borrow, and how much buying a property will impact on your current lifestyle.

In some situations, buying now with a lower deposit makes sense provided you can make regular repayments. While you may have to pay lenders mortgage insurance if you have less than a 20% deposit, you are able to begin building equity in your own home much sooner. There are also the non-financial rewards of buying property, including the piece of mind of owning your own home and the ability too add value through renovations and your own personal touches. In some cases where property growth rates are still sluggish, it may make sense to save a larger deposit and reduce both your monthly repayments and lenders mortgage insurance fees.

Click here to access Genworth’s buy now or wait and save tool, to see if buying now makes sense for you.