Time to dive in or wait for the wave to pass?
If you’re surfing the local property bubble right now, you’ve likely heard a few things about 2021; record-low interest rates, a hot market of frenzied buyers – and the latest headlines suggesting that the market has begun cooling off, with a slowdown in growth and buying predicted to ease in the later half of the year.
Home seekers are starting to back off in hope of more affordable buying opportunities to come, while sellers are starting to wonder if they’ve already missed the boat.
But is this the case at all, and should you be considering buying and selling in Sydney right now?
In every scenario, the right time to buy and sell is when you’re most comfortable with your financial situation and ready to make a move. While it’s tempting to try and time the market, there’s pros and cons to every cycle – and we’ve pointed these out for each circumstance below.
Buying a first home
For buyers looking to step into the market for the first time, there’s a cold reality to a hot market – and that is the risk of overborrowing and overspending. This would be the case if dwelling values fall after purchasing the property, where some buyers may experience mortgage stress or be forced to sell their property for less, or if interest rates climb down the track.
Of course, there’s a flip side to buying your first home in a boom, and that’s the fact that there’s no way of knowing if (or when) the boom will end. So, what seems like an overpriced property today could actually be next year’s bargain.
Additionally, the government is still offering incentives to eligible first home buyers determined to get into the market – and these include:
- The First Home Owner Grant (FHOG), a one-off payment of $10,000 if building your first home
- First Home Buyer Assistance Scheme (FHBAS), an exemption for dwellings under $650,000 (and concessions for under $800,000)
- The First Home Loan Deposit Scheme (FHLDS) for low and middle-income earners who have saved a deposit to avoid lender’s mortgage insurance.
Upgrading or downsizing
If you’re selling to buy, the only real disadvantage is that you may have to shuffle through a few extra heads at open homes and auctions this time round, compared with the last time you purchased your property. The benefit here is that selling your current home is likely to be met with similar competition – so whether you’re looking to trade up or down in the next purchase, it’s hard to lose so long as you have a good agent to guide you
Investing
This year has already seen a resurgence of property investors following a return of consumer confidence, increased employment prospects and signs that the Australian economy has improved after Covid-19. And while the rental market may not fully recover until international visitor restrictions are lifted, this is largely influential on inner city dwellings, and isn’t necessarily the case for finding and keeping a tenant in other Sydney regions; in fact, the opposite is occurring in South West Sydney, where landlords are seeing some of the lowest vacancy rates when leasing their property with Prudential Real Estate.
Given all of this, when it comes to deciding the best time to purchase an investment property, there is no hard and fast rule; the external factors that influence the sale and rental market could change in an instant.
The best time to invest is when your finances are in order, and after you’ve received strategic property advice from an experienced agent who can help you to understand the best type of property and location that will ensure growth over time.
Ultimately, trying to time the market can lead to a waste of time (and money). Whether you’re buying or selling, the multiple factors that come into play will typically mean there’s positives and negatives to every stage of the property cycle – it’s best to dip your feet in when the temperature is ‘just right’ for you!
Prudential Real Estate Campbelltown | (02) 4628 0033 | campbelltown@prudential.com.au
Prudential Real Estate Liverpool | (02) 9822 5999 | liverpool@prudential.com.au
Prudential Real Estate Macquarie Fields | (02) 9605 5333 | macquariefields@prudential.com.au
Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au
