By Jon Somers J.P. Dip FMBM, Mortgage Broker and Principle, Aussie Lane Cove
The answer is invariably yes, providing doing so doesn’t come with financial hardship. Property ownership, particularly in Australia, has long been viewed as one of the key ways people build long-term financial security. Whether it is one property or several over time, owning property can provide stability and future options, provided the purchase is affordable and suited to your circumstances. You will probably need to limit some of the things you currently spend money on though, like holidays, cars or eating out. And this may just be during the deposit-saving stage, but more likely it will be then and for some time after you’ve bought as well.
But hang on, you say. What about whether it’s a buyers or sellers market? What about the time of year? Or buying now with a smaller deposit versus waiting until a larger one is saved? This is where a proper conversation is worthwhile, because the right answer will be different for everyone. That said, broadly speaking, both buyers and sellers markets come with their own pros and cons. So if you’re ready, it’s generally best not to wait for one or the other. The same goes for the time of year, like Spring versus Winter. Again there’s pluses and minuses for each but there’s certainly no time like the present! And as for taking the plunge now rather than waiting to save more deposit, that can really only be properly assessed once all the options have been laid out for you by a mortgage professional.
Having been a mortgage broker for 22 years now, you’d expect I’ve spoken to a lot of potential buyers. Unfortunately, some people I spoke to many years ago still don’t own any property today. Mainly because they’ve been plagued by indecision, for one reason or another. The most common reasons I’ve seen are:
Waiting for the market to turn. The property market is cyclical and there will always be ups and downs, but historically, the ups far outweigh the downs.
Waiting for interest rates to drop. Rates will always rise and fall over time. And generally, property prices rise when rates are falling. So there’s rarely a reason to wait, provided you can comfortably afford the repayments now and feel confident you could manage if rates were to rise by 2 or 3%.
Waiting to save a larger deposit to make the loan slightly cheaper. Waiting a short time may be prudent, but waiting too long usually means prices rise faster than your savings can compensate for.
Being too busy to attend open inspections or auctions, or simply hitting buyers fatigue. Well, this is why buyers agents exist. A good one will find suitable properties far quicker than you can, particularly because they often know about properties before they’re even listed. Clients of mine have usually find that the agent’s fee was covered by savings on the purchase price. Plus, they get their Saturdays back! And if you’re buying interstate, a buyers agent is genuinely invaluable. I know good ones across most parts of Australia, so feel free to ask me for a referral.
Being too rigid about the target property. Life is one big compromise, and while I’m certainly not suggesting you just buy anything, flexibility really is key. Yes, you should have a list of non-negotiables, and that list will look different for a first home buyer compared to someone upgrading. However, being fixed on just one suburb, or too rigid about features or property condition, may well see you renting forever. And if you’re renting, you’re likely still compromising on aspects of your home anyway, while paying off someone else’s mortgage.
If any of this has got you thinking, I’m always happy to have a no-pressure conversation about where you’re at and what your options look like. That’s what we’re here for.
Jon Somers J.P. Dip FMBM
Mortgage Broker and Principle, Aussie Lane Cove
0409 844 920 | [email protected]
Jon Somers | Credit Representative 373979 | Aussie is the trading name for Lendi Group Distribution Pty Ltd (ACN 105 265 861, Australian Credit Licence 246786). This information is general in nature and does not constitute credit advice. Your circumstances should be reviewed before any loan is arranged.
