This. Most people I know have taken 12-24 months to find a property they like and be the successful bidder. No point waiting unless you are happy not purchasing for 3+ years
This is true if your a buyer during a boom.
Right now during the turn around heading into long decline of prices buyers are finding good properties alot faster with more stock and noticing when I show up to 2nd open inspection I'm the only one there.
Times have changed so fast and it's only going to get better and better for cashed up buyers.
Finding good properties faster? Where are you looking? Very little high quality stock being listed around a lot of desirable locations at the moment as wealthy vendors are holding out on listing to see what happens with the market. The small amount of high quality stock going up generally has lines out the door at inspections and are still fetching high prices at auction.
Ton of new listing's coming on everyda where i am at, regional nsw. All those empty holiday homes are starting to get expensive with double the interest rates.
Oh ok, I’m referring more to high quality PPOR family homes in desirable inner suburban areas, not regional holiday homes. Two completely different markets
Just be patient...the next couple of yrs is going to be a buyers market...everywhere.
It takes awhile for higher rates to filter through and the new reality to set in that money is actually expensive to borrow.
Close mate of mine that does high end builds in sydney just had 2x clients pull out of a new build for 4m and big Reno for 1.5m. Both are concerned with drop in their stocks prop portfolios and cash expensive to borrow and they don't want to sell now other assets at lower prices.
It all changes quickly, and with rates still going up gonna get worse.
Yeah that was my whole point, right now buyers are not finding good properties faster like you initially said, will take a year or two for the dust to settle and for quality properties to start being listed again
Open domain, select map mode in a ritzy suburb (say Manly and surrounding suburbs), zoom out a bit, there is a huge supply coming on the market now in areas where people massively over paid.
Not too familiar with the Sydney market, but that sounds a little bit strange. Are you saying people in blue chip suburbs are selling their PPORs after only 5 months of interest rate rises? My experience is generally the home owners in affluent areas are likely to be the least affected by rate rises due to often having access to huge generational wealth and generally owning their homes outright or having extremely small mortgages
No but there are a fair few who were looking to sell during the boom but held off thinking the sky’s the limit (not crazy when your house creates more wealth than your labour) who are now very keen to cash in while they still can
Source: family
I think that ship has sailed. Everyone I know in quality areas who were thinking of selling have just pulled out from the market and are going to give it a year or two for the dust to settle
Nah, I got a few downsizing neighbours who've held for 40+ yrs, it makes no difference to them whether they get a 2400% increase or a 2200% increase. However, their premium family homes tend to have massive interest and are competitive as hell. The news tends to report averages and the bad results to sell fear, you don't hear much about the auctions where the starting bid is still 150k above price guide.
There's an old Chinese proverb,
"The man who waits for roast duck to fly into his mouth, will wait a very very long time."
It probably has no relevance here, but hope that's some food for thought.
Listen to me who just did this for 18 months and has now lived in his place for a month. If you can afford it and find a place you like (it will take time) then don’t over think it and buy it, move in, delete all real estate apps, enjoy your life. I’ve been both sides and i feel like a massive weight has been taken off my shoulders now. The price i paid for it has quickly become irrelevant.
Another word of advice. When deciding, think what kind if lifestyle that property is going to give you and if it suits the lifestyle you want. It is something overlooked and now I’m in i would say its one of the most important aspects. I wake up very privileged to walk to the beach, creeks, cafe’s and restaurants. Good luck
The best time to buy a house is when you find one you like, and you can afford it.
You could be waiting for a long time for conditions to be perfect to buy.
Mine did. And I was expecting it, and it's fine. Prefer not to pay over 1500 extra a month for sure, but there's no stress. It's ours, and we bought well.
Don't be facetious, comes across as jealous about people having a go and buying
I am genuinely happy for you. You bought conservative but many did not and maxed out. I hope your decision continues to be a positive one as the next 5 years rolls on and jobs dry up etc.
I’m not talking about that, but is it better to buy now, or a week or a month or a few months in the future? That’s what I mean by timing. Yes, in general now is worse then it used to be, but it’s impossible to say if now is the worst time to buy over the next 5 years. It’s also hard to say if now is going to be a worse time then say 2 months time. Then you have a unique issue with property where even if you pinpoint the best time to buy, it’s near impossible to buy at exactly that point in time. It usually takes 1-2 months at the minimum.
I don’t disagree with your comment there, but it’s not really what I’m talking (or trying to talk) about.
You are absolutely correct.
That piece of advice worked fine for two decades so it keeps getting thrown around here and upvoted heavily.
But when rates are near rock bottom and property prices are still near the peak, it is most certainly NOT the best time to buy.
Whilst housing is a huge financial decision, and that's what we tend to focus on in a finance forum. However, it's also a huge life decision too, which impacts every aspect of your life, including family planning for many people.
You have to consider the financial and non-financial implications when making a bet on which way to go, as both ways probably share similar financial risks (i.e. overpaying vs loss of borrowing capacity). However on the life planning part, the risks are very different.
My wife and I wanted a house before we started having kids, so that's what drove us to buy our current PPOR. Waiting years to maybe get a better deal, noting that housing cycles are typically 5-10yrs, just means we'd increase our risk of having difficulties conceiving as we'd then be in our late 30s. Relying on IVF to have multiple kids could easily turn into a bigger black hole for money than housing.
Same here.
We've just bought, well within our means and aren't worried about interest rates unless they hit 8%+.
Not interested in waiting another 5 years before starting a family etc. If it's a long term hold - buy when it works for you and within budget.
Shop around and find a good deal, be prepared to walk as you offer much less than asking price
And then be prepared to see how the property keeps dropping in price for the next 3-4 years erasing all your deposit
No point trying to catch a falling knife. Also there is no chance we see a sudden 20 percent increase with these interest rate so there is no need to rush in.
Rates still going up and so many people are over-leveraged. I think the sweet point might be mid-2023. Now is the time to get your finances ready and start researching. Learn what houses are really worth in your desired location and what is good value.
I'd just keep an eye on global markets as a global recession is increasingly likely. That could help or hinder, depending on your intended debt/capital ratio.
Wait.
Australia is an import dependent economy. The world is not ready for high interest rates and the life that comes with it. Not the people, nor the banks. Let alone Australia.
Wait not because you will get cheaper properties but wait cause you'll get better value for your dollar. Better quality.
Anyone who makes assertions on forecasting the market is a fool. No one knows, too many variables. People throwing darts have outpaced most financial experts. Listen to everyone but believe no one and make your own decision.
I would personally wait till March to mid 2023. Interested rates are going up and the effects have not been realised yet. You are right that your borrowing capacity will be effected. So it is a balancing act. Aim for 2 bedder low rise. Avoid the high rises in North Sydney. North Sydney is undergoing a lot of change. More residential being build. The new Metro is coming at Victoria Cross Station. The whole area is gentrifying. Check out the plans a lot more entertainment precinct planned. Previously business area now Coles and Woolies moved in. A lot of money being spent. Good investment. Very easy to rent out. I bought in 2018 on the back of all this.
If everyone waits for March 2023, then you're gonna be up against one hell of a FOMO market. Given the time it takes to find a PPOR, timing for the bottom is almost guaranteed to have you buying into a skyrocketing FOMO market.
But yes I agree with North Sydney for investment purposes. Too many new builds coming online for the metro.
Forgot to add the new Metro is expected to open in 2024. Generally with major projects like that there is normally a big uptick in property prices when it opens. Wish I had a crystal ball as the housing market is really unique at the moment but if you are keeping for the long term then it should be a good investment
Thank you and yeah I would be looking at a more waverton/Wollstonecraft area is smaller 12 apartment buildings. Good to hear north syd is getting some life beyond weekday 9-5!
Is this an investment or do you want to buy a house to live in? You seem unclear.
If it's to live in, buy when you find a house that you like for a price that is reasonable for you. And then forget about the value of the house, it doesn't matter anymore, it's your home.
If it's an investment, different story.
I'd just buy if you find a house you really like. You might pay a bit more than if you buy in 2 years, but you'd also be paying rent for 2 years (so add that to the discount price) and also, if you wait for the dip, you might have to buy something you don't really like in order to 'save the most'.
Interest rates are only heading up, borrowing capacity is heading down, house prices are therefore heading down.
Think of it this way, you are likely to lose money in the housing market in the next year. Why buy today when you could buy tomorrow for less money. Furthermore, why buy today when next month is going to be 2% cheaper.
Stick your cash into a savings account at 0.1% and you will still be ahead in the next year.
Now the equation changes if you have to live in it, but sounds like this isn't a real concern currently.
If you still think you want to buy, just be acceptable if losing 10% and acknowledge that it might be years before you even return to parity. Yet alone cancel out that interest you have paid.
Because your borrowing capacity may have dropped 20% . So even if you could buy that property 10% cheaper you may not be able to borrow the money to buy it.
So you are recommending buying an asset that will decrease in value , because the opportunity to buy it in the future won't exist.
You won't have the opportunity in the future because banks don't think you could service the loan. So you'll have a bigger mortgage at a high interest rate.
That sounds even more like a reason not to buy it.
I think it depends what's the purpose of the purchase.
If it's an investment, what's the time horizon? 1, 2, 5, 7 years? If so, looking at property growth so you can cash out your investment is great.
If it's a home for 10+ years, what the hell do you care what you pay? What really matters is if you can afford the repayments given more rate rises.
I honestly believe too many people get caught up with wanting property growth _and_ a home. In reality, there are a multitude of factors (ordinary and supernatural) that affects property prices
The main thing you should consider buying in North Sydney is the amount of new apartment construction happening largely due to the rezoning of areas around the Metro which is coming in 2024. 5 year supply forecast is \~1,000 new dwellings in the next 5 years which will get the number of apartments to be \~4,500 in total [https://www.planning.nsw.gov.au/Research-and-Demography/Sydney-Housing-Supply-Forecast](https://www.planning.nsw.gov.au/Research-and-Demography/Sydney-Housing-Supply-Forecast) (go to the excel doc and filter by suburb).
To be fair 1,000 is about the same amount of new dwellings that came in the last 5 years, but if you look at the Vacancy rates when the completions happened in 2018 Vacancy went over 5% which is pretty bad. The consistent new supply has meant rent growth has been pretty anemic for quite a while too [https://sqmresearch.com.au/graph\_vacancy.php?postcode=2060&t=1](https://sqmresearch.com.au/graph_vacancy.php?postcode=2060&t=1). Once the new supply completes over the next few years I think the current low vacancy goes higher and you won't get rental growth (you could even get a reduction).
Good news is that after this development push there will be very few sites left which are low density and not heritage, so supply is going to be difficult to create moving forward without knocking down density, modifying commercial buildings to be residential or removing heritage controls. So long term if there is sufficient demand it might come good, but most parts of the suburb are pretty bland and not that desirable by Owner Occupiers other than somewhere like the Hayberry precinct area.
I'd still be looking around to buy and think apartments on the LNS are a good long term proposition, but would look at different suburbs.
Good points here. Renting it out in not the short term goal besides 1-3 years now, would probs live in it after that for 5 years then rent out for long term. When I say north syd, I’m more looking at waverton and Wollstonecraft areas. Anywhere else you’d recommend?
Nice one.
North Sydney in that Hayberry precinct area I mentioned is good (blends into Crows Nest).
I like Waverton particularly the apartments surrounding Brennan park.
Woolstonecraft I like towards the top area which is in walking distance to Crows Nest shops and the Metro. Not much doing down near the station though and I wouldn't buy there.
Cammeray has no rail but near the shops I think it's a solid area, same as Lane Cove near the village which is significantly cheaper too.
Neutral Bay and Mosman are obviously blue chip and always desirable in the right pockets. Expensive for good stock though.
While we are in an inflationary period, everything is going up including houses if you look forward 5+ years. 600ml Coca Cola going to be $6 and big Mac meal will be $15.
Just borrow less than you can afford.
I’m the worst with financials but I’d probably wait at least a while to get a better idea what the market is doing. Its been mental on the way up… so at least see if it goes a bit mental on the way down (so far so good). That’s my ignorant advice.
I feel like at worse for new buyers it will stabilise… at best it will go down to pre pandemic levels.
If it’s your first home and you want a place to live long term… I’d buy in Feb or March…. If it’s purely an investment then wait. Still no harm is checking out open homes and getting a feel for things. Keep an eye on what is selling for what.
Whatever happens I think it’s safe to say we won’t have that FOMO for a good while, so that’s nice. I’d rather have a little fear of loss than FOMO. The loss in value will be repaid eventually.
It's hard choice but if it was me I might wait until 2024/2025 see if the market drops as much as predicted. It does rely alot on your personal finances, income and job outlook.
If you find the right property, I would buy now.
In all honesty, this doomsday property crash has been in projection since about 2005. Even if prices momentarily dip over the next couple of years, they always bounce back (assuming capital city in an okay area and not talking about regional/remote areas).
I think you need to make decisions based on your timeline and worry less about the future stuff, as none of it is controllable anyway.
Imagine hearing about this doomsday scenario that was supposed to happen for 15 years……. Then you buy. Then it happens.
That is reality for many many people. It just happened.
I keep hearing this. Who says it stops there? Do you know? What if it’s 40%? Could happen if the world economy crashes.
Anyone who rode the gains did not cash out, they are still on the train so not sure anyone should rest on historical paper gains. In fact stats are showing ppl borrowed more AGAINST those gains so yeah, not looking great.
not if we go thru another 08 situation again next year or 2
you buy a house and lose your job in a global recession, then what
landlords have not realise yet whats gona happen next year when rates hit 9 percent and people start losing jobs in a recession
We’re settling on a house in 20 days after a 90 day settlement period.
No regrets, going to live in it for 10+ years.
Let’s face it though, if you’re looking to buy this year you won’t be in a place until March at the earliest.
Now is the right time to start trying. But personally I wouldn’t touch North Sydney. I’d aim for Cremorne, Neutral Bay, Kirribilli, Wollstonecraft etc.
Yeah sorry I should’ve been more specific about North Syd, I’m not looking near north syd city, more waverton, Wollstonecraft, Greenwich, crows nest etc
[I'll just leave this here.](https://www.news.com.au/finance/real-estate/buying/worst-case-scenario-fears-house-prices-could-plunge-by-435-per-cent/news-story/af75a630f4e99db793e0abd9256d849c?amp)
Already hitting apparently. Houses linked to zombie businesses are getting foreclosed now by banks. Not mass yet but it’s started and will be mass next 6 months. Looks like Christmas is going to be sad.
If you are “ready” to buy, you should probably buy. No way to know what will happen in the market, however any number of foreseen future events could price you out again. You can (and should) only make a call based on what you know you can do now, not speculation on what the next few years will bring.
The odds of recession is going up, probably wait a bit would not hurt. House price is not going up anyway. If we do have a downturn next year, it won’t recover as fast as 2020, because central bank can’t print much money any more. you have plenty of time for house hunting.
The downturn is here mate. Investment grade properties are at a 10-15% discount. Knockdown properties are barely going for land value in some areas. The idea that there will be another 15-30% down to go is perfect for big investors to snatch all of these properties up before the cycle starts over again.
I would think about buying soon. If Credit Suisse implodes, which seems likely, it may be hard to get any sort of loan. At least get pre approval now so you know what sort of budget you can plan for. GFC II may be coming soon.
Lol people keep waiting for a massive drop it never happens. Houses may drop 10 to 15% but by the time you wait and buy they would've gone up 20% again. Best time is when you're ready plain and simple.
To avoid paying stamp duty (it’s more than 6 months worth of rent) and I’m still fine living at home for the next 1-2 years, so why move out if I don’t need to
If you can wait, then I would wait. I am in a position of needing to buy again in the relatively short term, but I also know that I will end up with a short term loss on the property. So I am looking at it as a long-term purchase related to need, but am very conscious of not extending myself and only going after places that are already good value (eg. estate sales, livable but unrenovated homes) to help mitigate loss. Waiting and saving seems way more sensible unless you are desperate to buy or come across a really great deal.
I think you need to form an opinion on what is happening more macro, then overlay your situation with that.
You will not get any resolution here because you are you.
Take your time to find something you like (which will probably take months). Buy well within your means and take into account 1.5-2%+ in interest increases.
Do not get too attached to one property and negotiate hard when you purchase.
Look around for something you love and can see yourself living in/holding for ten years. If it comes along buy it. While the market is heading down at the moment it won't stay down forever. Investing in stocks is similar, but you can't live in a stock portfolio.
If you can afford it if rates go up a lot, now is a good time to buy, as everyone is waiting for some magic halving of prices and them being the only one with money. When it is a “good time to buy”, there will be a hundred other people bidding on the same place.
If it’s a long term hold and you can pay for it comfortably, go for it I say. (Not financial advice, just a dude on his couch).
I jumped in last week even though i think the market is on the way down. I have a small loan and like you will be renting it out.
I do kind of regret my decision as alot of extra costs popped up in order to get my loan approved if it wasnt for that i wouldnt be that worried.
The way i see it apartments didnt grow much during covid like houses so they wont be as greatly affected.
Not only that developers are just going to hang around until the government brings in more policies to benefit them when selling to FHB so i suspect supply will still be low for a while yet with rents continuing to increase.
I doubt you will see much growth short term, it will take a while to find something you like plus now is a great time to be low balling.
Don't know your financial situation but you are now looking for extend your debt amount by purchasing an asset.
Make sure your calculate your repayment rate at 10% at least before making any moves because this is the only thing you are able to control. The FED is doubling down on their rate hike and possibly trash the economic before getting the inflation contained
Don’t buy now if it’s an investment unless you are mostly a cash investor. You want a minimum 30% deposit otherwise the mortgage repayments will be too high
There is an option that no one talks about in regards to stamp duty in NSW.
'You have to move into your house within the first year and live in there for 6 month in a row' This also means you could rent it for 11 months, 30 days and move in (on paper) on the last day of the first year (what we did) and have it rented for the first year while interest rates are high and your working out what you want to do
A) wait it out
B) if you buy it now do interest only until the market stabilises
C) apartment is really low yield if you're thinking of investing only. Given that it is your first IP why not buy a house in an affordable area first? An apartment that will have the FHB grant is less than 650k which I doubt will exist in North Sydney.
>if I wait for the market to come down further, I’m also letting interest rates go up and my borrowing capacity go down, so where’s the equilibrium.
You have essentially presented a math problem here. A spreadsheet is your friend. Work out what your interest bill will be if you buy now, net out rent if you don't. Figure out what higher interest rates are going to cost you over the next cycle, until they are likely to fall again.
My guess is that when people can see through to lower interest rates (as opposed to what they are now), they will pile back into the market, likely yanking property prices up again quite quickly (this won't happen for a while yet). The tax incentives are still there, and demand for rental accommodation is tight and getting tighter. A lot of people have squirreled away some cash over the last 2 years. I reckon they are waiting for their moment.
Figure out how much of a debt you can cover at peak interest rates, and how much of a discount on property price you need to come out ahead.
Then take your sweet time. As a buyer in this market, you hold the cards.
You aren't flipping houses, you said yourself this is a "long term investment". I'm here to tell you that house prices over the long term (10+ years) will increase, so what the market is doing on a day-to-day or year-to-year basis is irrelevant.
Ignore what "the market" is doing and buy something that you like that you can afford.
I thought you had to live in it for 12 months to avoid capital gains. We are looking to move to a bigger town and many agents are still trying to inflate the price. We looked through a couple and they say there are 2 offers in close to the high end. 2 weeks later that property is still on real estate for sale. Our broker also pulled up info that the property we looked at sat on the market for 5 months last year. Many agents still want the FOMO frienzied buying they had 6 months ago but there is much more caution now. Also 2 properties we looked at had offers removed as they couldn’t get the finance. I think if you want to buy make an offer you think it’s worth as I’m thinking things will change a bit more after tomorrow’s rate rise. We are just hanging back a bit at this stage and watching the prices. Some have dropped and some even listed as offers considered.
Start looking now, will probably take you 6 months to find something anyway.
This. Most people I know have taken 12-24 months to find a property they like and be the successful bidder. No point waiting unless you are happy not purchasing for 3+ years
This is true if your a buyer during a boom. Right now during the turn around heading into long decline of prices buyers are finding good properties alot faster with more stock and noticing when I show up to 2nd open inspection I'm the only one there. Times have changed so fast and it's only going to get better and better for cashed up buyers.
Finding good properties faster? Where are you looking? Very little high quality stock being listed around a lot of desirable locations at the moment as wealthy vendors are holding out on listing to see what happens with the market. The small amount of high quality stock going up generally has lines out the door at inspections and are still fetching high prices at auction.
Ton of new listing's coming on everyda where i am at, regional nsw. All those empty holiday homes are starting to get expensive with double the interest rates.
Oh ok, I’m referring more to high quality PPOR family homes in desirable inner suburban areas, not regional holiday homes. Two completely different markets
Just be patient...the next couple of yrs is going to be a buyers market...everywhere. It takes awhile for higher rates to filter through and the new reality to set in that money is actually expensive to borrow. Close mate of mine that does high end builds in sydney just had 2x clients pull out of a new build for 4m and big Reno for 1.5m. Both are concerned with drop in their stocks prop portfolios and cash expensive to borrow and they don't want to sell now other assets at lower prices. It all changes quickly, and with rates still going up gonna get worse.
Currently waiting for the mythical crash so I can easily get tradies to put a 2nd bathroom in.
Yeah that was my whole point, right now buyers are not finding good properties faster like you initially said, will take a year or two for the dust to settle and for quality properties to start being listed again
Late 2023 early 2024 will be an awesome time to buy. 2026 we see the first rate drop from 8.5% to 8.25% lol Imagine the carnage at 10%
I'm looking in Melbourne, no good stock and what comes up is still going for high prices since there is no competition.
Open domain, select map mode in a ritzy suburb (say Manly and surrounding suburbs), zoom out a bit, there is a huge supply coming on the market now in areas where people massively over paid.
Not too familiar with the Sydney market, but that sounds a little bit strange. Are you saying people in blue chip suburbs are selling their PPORs after only 5 months of interest rate rises? My experience is generally the home owners in affluent areas are likely to be the least affected by rate rises due to often having access to huge generational wealth and generally owning their homes outright or having extremely small mortgages
Not sure really, just noticed a significant increase in listings lately.
No but there are a fair few who were looking to sell during the boom but held off thinking the sky’s the limit (not crazy when your house creates more wealth than your labour) who are now very keen to cash in while they still can Source: family
I think that ship has sailed. Everyone I know in quality areas who were thinking of selling have just pulled out from the market and are going to give it a year or two for the dust to settle
Nah, I got a few downsizing neighbours who've held for 40+ yrs, it makes no difference to them whether they get a 2400% increase or a 2200% increase. However, their premium family homes tend to have massive interest and are competitive as hell. The news tends to report averages and the bad results to sell fear, you don't hear much about the auctions where the starting bid is still 150k above price guide.
“Short answer, yes with an if; long answer, no with a but.”
There's an old Chinese proverb, "The man who waits for roast duck to fly into his mouth, will wait a very very long time." It probably has no relevance here, but hope that's some food for thought.
This is the comment I needed to see today.
I see what you did there. Hopefully OP doesn't bite off more than they can chew.
To be the contrarian: "... but if he bites the duck before it's killed, it's likely the duck will bite back"
BRB making a flying roast duck restaurant.
Will this involve specialised waiters throwing food onto diners mouths?
pm me when i can make a booking
Mm, now you got me hungry
truth - still waiting
Man who walk through airport sideways is going to Bangkok.
Listen to me who just did this for 18 months and has now lived in his place for a month. If you can afford it and find a place you like (it will take time) then don’t over think it and buy it, move in, delete all real estate apps, enjoy your life. I’ve been both sides and i feel like a massive weight has been taken off my shoulders now. The price i paid for it has quickly become irrelevant. Another word of advice. When deciding, think what kind if lifestyle that property is going to give you and if it suits the lifestyle you want. It is something overlooked and now I’m in i would say its one of the most important aspects. I wake up very privileged to walk to the beach, creeks, cafe’s and restaurants. Good luck
The best time to buy a house is when you find one you like, and you can afford it. You could be waiting for a long time for conditions to be perfect to buy.
Is that right? What if you borrow at record low rates and your repayment double from there in 6 months? I’d say that is a time not to buy.
Then your still better off than if you lived in the rental that had a 50-100% rent hike over the same 2 year period.
Mine did. And I was expecting it, and it's fine. Prefer not to pay over 1500 extra a month for sure, but there's no stress. It's ours, and we bought well. Don't be facetious, comes across as jealous about people having a go and buying
I am genuinely happy for you. You bought conservative but many did not and maxed out. I hope your decision continues to be a positive one as the next 5 years rolls on and jobs dry up etc.
wouldn’t you try to get a fixed rate if rates are that low
Might survive a couple of years or so, but the banks will get it back in the end.
Theoretically yes, but it’s near impossible to time perfectly.
Most ppl should have seen this crisis coming. Money printing and inflation is not the time to go heavy leverage.
I’m not talking about that, but is it better to buy now, or a week or a month or a few months in the future? That’s what I mean by timing. Yes, in general now is worse then it used to be, but it’s impossible to say if now is the worst time to buy over the next 5 years. It’s also hard to say if now is going to be a worse time then say 2 months time. Then you have a unique issue with property where even if you pinpoint the best time to buy, it’s near impossible to buy at exactly that point in time. It usually takes 1-2 months at the minimum. I don’t disagree with your comment there, but it’s not really what I’m talking (or trying to talk) about.
If only there was a way to lock in payments for longer than 6 months.
Ppl are too stretched, that’s why Australians are heavy variable. They gone. It’s sad.
You are absolutely correct. That piece of advice worked fine for two decades so it keeps getting thrown around here and upvoted heavily. But when rates are near rock bottom and property prices are still near the peak, it is most certainly NOT the best time to buy.
Whilst housing is a huge financial decision, and that's what we tend to focus on in a finance forum. However, it's also a huge life decision too, which impacts every aspect of your life, including family planning for many people. You have to consider the financial and non-financial implications when making a bet on which way to go, as both ways probably share similar financial risks (i.e. overpaying vs loss of borrowing capacity). However on the life planning part, the risks are very different. My wife and I wanted a house before we started having kids, so that's what drove us to buy our current PPOR. Waiting years to maybe get a better deal, noting that housing cycles are typically 5-10yrs, just means we'd increase our risk of having difficulties conceiving as we'd then be in our late 30s. Relying on IVF to have multiple kids could easily turn into a bigger black hole for money than housing.
Same here. We've just bought, well within our means and aren't worried about interest rates unless they hit 8%+. Not interested in waiting another 5 years before starting a family etc. If it's a long term hold - buy when it works for you and within budget.
Most people in this sub have never experienced whats about to happen next.
Shop around and find a good deal, be prepared to walk as you offer much less than asking price And then be prepared to see how the property keeps dropping in price for the next 3-4 years erasing all your deposit
And in another 10 to 20 years you'll look back and wonder how you brought a property so cheap.
People tend to forget how much interest they pay during those 10-20 years, most often than not are the same as the value of the property
I won’t be buying for at least another 6mo
No point trying to catch a falling knife. Also there is no chance we see a sudden 20 percent increase with these interest rate so there is no need to rush in.
Rates still going up and so many people are over-leveraged. I think the sweet point might be mid-2023. Now is the time to get your finances ready and start researching. Learn what houses are really worth in your desired location and what is good value. I'd just keep an eye on global markets as a global recession is increasingly likely. That could help or hinder, depending on your intended debt/capital ratio.
Wait. Australia is an import dependent economy. The world is not ready for high interest rates and the life that comes with it. Not the people, nor the banks. Let alone Australia. Wait not because you will get cheaper properties but wait cause you'll get better value for your dollar. Better quality.
Anyone who makes assertions on forecasting the market is a fool. No one knows, too many variables. People throwing darts have outpaced most financial experts. Listen to everyone but believe no one and make your own decision.
I would personally wait till March to mid 2023. Interested rates are going up and the effects have not been realised yet. You are right that your borrowing capacity will be effected. So it is a balancing act. Aim for 2 bedder low rise. Avoid the high rises in North Sydney. North Sydney is undergoing a lot of change. More residential being build. The new Metro is coming at Victoria Cross Station. The whole area is gentrifying. Check out the plans a lot more entertainment precinct planned. Previously business area now Coles and Woolies moved in. A lot of money being spent. Good investment. Very easy to rent out. I bought in 2018 on the back of all this.
If everyone waits for March 2023, then you're gonna be up against one hell of a FOMO market. Given the time it takes to find a PPOR, timing for the bottom is almost guaranteed to have you buying into a skyrocketing FOMO market. But yes I agree with North Sydney for investment purposes. Too many new builds coming online for the metro.
Forgot to add the new Metro is expected to open in 2024. Generally with major projects like that there is normally a big uptick in property prices when it opens. Wish I had a crystal ball as the housing market is really unique at the moment but if you are keeping for the long term then it should be a good investment
Thank you and yeah I would be looking at a more waverton/Wollstonecraft area is smaller 12 apartment buildings. Good to hear north syd is getting some life beyond weekday 9-5!
Is this an investment or do you want to buy a house to live in? You seem unclear. If it's to live in, buy when you find a house that you like for a price that is reasonable for you. And then forget about the value of the house, it doesn't matter anymore, it's your home. If it's an investment, different story.
I'd just buy if you find a house you really like. You might pay a bit more than if you buy in 2 years, but you'd also be paying rent for 2 years (so add that to the discount price) and also, if you wait for the dip, you might have to buy something you don't really like in order to 'save the most'.
Wait. For the love of god. Wait.
Yea I fully concur. Do not buy now
Interest rates are only heading up, borrowing capacity is heading down, house prices are therefore heading down. Think of it this way, you are likely to lose money in the housing market in the next year. Why buy today when you could buy tomorrow for less money. Furthermore, why buy today when next month is going to be 2% cheaper. Stick your cash into a savings account at 0.1% and you will still be ahead in the next year. Now the equation changes if you have to live in it, but sounds like this isn't a real concern currently. If you still think you want to buy, just be acceptable if losing 10% and acknowledge that it might be years before you even return to parity. Yet alone cancel out that interest you have paid.
Because your borrowing capacity may have dropped 20% . So even if you could buy that property 10% cheaper you may not be able to borrow the money to buy it.
So you are recommending buying an asset that will decrease in value , because the opportunity to buy it in the future won't exist. You won't have the opportunity in the future because banks don't think you could service the loan. So you'll have a bigger mortgage at a high interest rate. That sounds even more like a reason not to buy it.
I think it depends what's the purpose of the purchase. If it's an investment, what's the time horizon? 1, 2, 5, 7 years? If so, looking at property growth so you can cash out your investment is great. If it's a home for 10+ years, what the hell do you care what you pay? What really matters is if you can afford the repayments given more rate rises. I honestly believe too many people get caught up with wanting property growth _and_ a home. In reality, there are a multitude of factors (ordinary and supernatural) that affects property prices
Fair point if you think of it just as a financial asset.
If its a home is different, you need to live somewhere. What OP is talking about is an investment, so yeh, a financial asset.
If it's an asset he can rent it out
Name checks out
The main thing you should consider buying in North Sydney is the amount of new apartment construction happening largely due to the rezoning of areas around the Metro which is coming in 2024. 5 year supply forecast is \~1,000 new dwellings in the next 5 years which will get the number of apartments to be \~4,500 in total [https://www.planning.nsw.gov.au/Research-and-Demography/Sydney-Housing-Supply-Forecast](https://www.planning.nsw.gov.au/Research-and-Demography/Sydney-Housing-Supply-Forecast) (go to the excel doc and filter by suburb). To be fair 1,000 is about the same amount of new dwellings that came in the last 5 years, but if you look at the Vacancy rates when the completions happened in 2018 Vacancy went over 5% which is pretty bad. The consistent new supply has meant rent growth has been pretty anemic for quite a while too [https://sqmresearch.com.au/graph\_vacancy.php?postcode=2060&t=1](https://sqmresearch.com.au/graph_vacancy.php?postcode=2060&t=1). Once the new supply completes over the next few years I think the current low vacancy goes higher and you won't get rental growth (you could even get a reduction). Good news is that after this development push there will be very few sites left which are low density and not heritage, so supply is going to be difficult to create moving forward without knocking down density, modifying commercial buildings to be residential or removing heritage controls. So long term if there is sufficient demand it might come good, but most parts of the suburb are pretty bland and not that desirable by Owner Occupiers other than somewhere like the Hayberry precinct area. I'd still be looking around to buy and think apartments on the LNS are a good long term proposition, but would look at different suburbs.
Good points here. Renting it out in not the short term goal besides 1-3 years now, would probs live in it after that for 5 years then rent out for long term. When I say north syd, I’m more looking at waverton and Wollstonecraft areas. Anywhere else you’d recommend?
Nice one. North Sydney in that Hayberry precinct area I mentioned is good (blends into Crows Nest). I like Waverton particularly the apartments surrounding Brennan park. Woolstonecraft I like towards the top area which is in walking distance to Crows Nest shops and the Metro. Not much doing down near the station though and I wouldn't buy there. Cammeray has no rail but near the shops I think it's a solid area, same as Lane Cove near the village which is significantly cheaper too. Neutral Bay and Mosman are obviously blue chip and always desirable in the right pockets. Expensive for good stock though.
While we are in an inflationary period, everything is going up including houses if you look forward 5+ years. 600ml Coca Cola going to be $6 and big Mac meal will be $15. Just borrow less than you can afford.
I’m the worst with financials but I’d probably wait at least a while to get a better idea what the market is doing. Its been mental on the way up… so at least see if it goes a bit mental on the way down (so far so good). That’s my ignorant advice. I feel like at worse for new buyers it will stabilise… at best it will go down to pre pandemic levels. If it’s your first home and you want a place to live long term… I’d buy in Feb or March…. If it’s purely an investment then wait. Still no harm is checking out open homes and getting a feel for things. Keep an eye on what is selling for what. Whatever happens I think it’s safe to say we won’t have that FOMO for a good while, so that’s nice. I’d rather have a little fear of loss than FOMO. The loss in value will be repaid eventually.
It's hard choice but if it was me I might wait until 2024/2025 see if the market drops as much as predicted. It does rely alot on your personal finances, income and job outlook.
If you find the right property, I would buy now. In all honesty, this doomsday property crash has been in projection since about 2005. Even if prices momentarily dip over the next couple of years, they always bounce back (assuming capital city in an okay area and not talking about regional/remote areas). I think you need to make decisions based on your timeline and worry less about the future stuff, as none of it is controllable anyway.
Imagine hearing about this doomsday scenario that was supposed to happen for 15 years……. Then you buy. Then it happens. That is reality for many many people. It just happened.
Lol with my luck, this is what will happen
Newsflash: it’s happening
Oh no the house was that went up in value over 20% in the past two years has come back 15% what a disastrous crash!!!
I keep hearing this. Who says it stops there? Do you know? What if it’s 40%? Could happen if the world economy crashes. Anyone who rode the gains did not cash out, they are still on the train so not sure anyone should rest on historical paper gains. In fact stats are showing ppl borrowed more AGAINST those gains so yeah, not looking great.
not if we go thru another 08 situation again next year or 2 you buy a house and lose your job in a global recession, then what landlords have not realise yet whats gona happen next year when rates hit 9 percent and people start losing jobs in a recession
All I see are we are hiring signs everywhere
Same as 2008. Jobs galore.
Wait it out, if you can. Very real chance you will get a 20% off deal in the next year or three.
We’re settling on a house in 20 days after a 90 day settlement period. No regrets, going to live in it for 10+ years. Let’s face it though, if you’re looking to buy this year you won’t be in a place until March at the earliest.
Wait - shit will hit the fan
Now is the right time to start trying. But personally I wouldn’t touch North Sydney. I’d aim for Cremorne, Neutral Bay, Kirribilli, Wollstonecraft etc.
Yeah sorry I should’ve been more specific about North Syd, I’m not looking near north syd city, more waverton, Wollstonecraft, Greenwich, crows nest etc
[I'll just leave this here.](https://www.news.com.au/finance/real-estate/buying/worst-case-scenario-fears-house-prices-could-plunge-by-435-per-cent/news-story/af75a630f4e99db793e0abd9256d849c?amp)
> Digital Finance Analytics principal Martin North Man's a serial bear though. Nothing wrong with that outlook but after awhile, it becomes repetitive
Wait. Save cash. You will start finding distressed properties soon. With the way things are going probably very soon
Already hitting apparently. Houses linked to zombie businesses are getting foreclosed now by banks. Not mass yet but it’s started and will be mass next 6 months. Looks like Christmas is going to be sad.
Wait, property market worldwide is about to collapse
If you are “ready” to buy, you should probably buy. No way to know what will happen in the market, however any number of foreseen future events could price you out again. You can (and should) only make a call based on what you know you can do now, not speculation on what the next few years will bring.
The odds of recession is going up, probably wait a bit would not hurt. House price is not going up anyway. If we do have a downturn next year, it won’t recover as fast as 2020, because central bank can’t print much money any more. you have plenty of time for house hunting.
Rents are going up and now may be a good time to get a good deal on a property an older family may be liquidating for retirement.
The money you save on a house purchase if we do have downturn on housing will easily outperform whatever rents increases.
The downturn is here mate. Investment grade properties are at a 10-15% discount. Knockdown properties are barely going for land value in some areas. The idea that there will be another 15-30% down to go is perfect for big investors to snatch all of these properties up before the cycle starts over again.
I would think about buying soon. If Credit Suisse implodes, which seems likely, it may be hard to get any sort of loan. At least get pre approval now so you know what sort of budget you can plan for. GFC II may be coming soon.
No point waiting as the government will stop any major drops like always. If you’re ready, go nuts.
I am agnostic about this but how will they stop it without driving inflation up?
Your guess is as good as mine.. I’m just very jaded to any talk of a significant “crash” despite all the conditions being there for one.
Stamp duty changes, land tax changes, FHB grants and benefits. Edit: word
There is no "bad" time to buy. Only bad times to sell.
Lol people keep waiting for a massive drop it never happens. Houses may drop 10 to 15% but by the time you wait and buy they would've gone up 20% again. Best time is when you're ready plain and simple.
Why live for 6 months then rent out for 1-2 years before moving back in?
To avoid paying stamp duty (it’s more than 6 months worth of rent) and I’m still fine living at home for the next 1-2 years, so why move out if I don’t need to
Have you factored in the tax components for those 6 months as well ?
If you can wait, then I would wait. I am in a position of needing to buy again in the relatively short term, but I also know that I will end up with a short term loss on the property. So I am looking at it as a long-term purchase related to need, but am very conscious of not extending myself and only going after places that are already good value (eg. estate sales, livable but unrenovated homes) to help mitigate loss. Waiting and saving seems way more sensible unless you are desperate to buy or come across a really great deal.
Wait for a year then start looking and by the time you find something the 45% drop will have bottomed.
Best time to buy a house is 20 years ago. 2nd best time is today. Make of that what you will……
Wouldn’t recommend an apartment in North Sydney. There are many more viable options that are experiencing high capital growth
Do your maths if it's primarily investment. If it works it works
I think you need to form an opinion on what is happening more macro, then overlay your situation with that. You will not get any resolution here because you are you.
Take your time to find something you like (which will probably take months). Buy well within your means and take into account 1.5-2%+ in interest increases. Do not get too attached to one property and negotiate hard when you purchase.
The real question is, when is the bubble going to burst?
Look around for something you love and can see yourself living in/holding for ten years. If it comes along buy it. While the market is heading down at the moment it won't stay down forever. Investing in stocks is similar, but you can't live in a stock portfolio.
If you can afford it if rates go up a lot, now is a good time to buy, as everyone is waiting for some magic halving of prices and them being the only one with money. When it is a “good time to buy”, there will be a hundred other people bidding on the same place. If it’s a long term hold and you can pay for it comfortably, go for it I say. (Not financial advice, just a dude on his couch).
I jumped in last week even though i think the market is on the way down. I have a small loan and like you will be renting it out. I do kind of regret my decision as alot of extra costs popped up in order to get my loan approved if it wasnt for that i wouldnt be that worried. The way i see it apartments didnt grow much during covid like houses so they wont be as greatly affected. Not only that developers are just going to hang around until the government brings in more policies to benefit them when selling to FHB so i suspect supply will still be low for a while yet with rents continuing to increase. I doubt you will see much growth short term, it will take a while to find something you like plus now is a great time to be low balling.
Don't know your financial situation but you are now looking for extend your debt amount by purchasing an asset. Make sure your calculate your repayment rate at 10% at least before making any moves because this is the only thing you are able to control. The FED is doubling down on their rate hike and possibly trash the economic before getting the inflation contained
Personal choice, but I would wait
You answered your own question when you said “you can’t time the market”.
Don’t buy now if it’s an investment unless you are mostly a cash investor. You want a minimum 30% deposit otherwise the mortgage repayments will be too high
There is an option that no one talks about in regards to stamp duty in NSW. 'You have to move into your house within the first year and live in there for 6 month in a row' This also means you could rent it for 11 months, 30 days and move in (on paper) on the last day of the first year (what we did) and have it rented for the first year while interest rates are high and your working out what you want to do
A) wait it out B) if you buy it now do interest only until the market stabilises C) apartment is really low yield if you're thinking of investing only. Given that it is your first IP why not buy a house in an affordable area first? An apartment that will have the FHB grant is less than 650k which I doubt will exist in North Sydney.
>if I wait for the market to come down further, I’m also letting interest rates go up and my borrowing capacity go down, so where’s the equilibrium. You have essentially presented a math problem here. A spreadsheet is your friend. Work out what your interest bill will be if you buy now, net out rent if you don't. Figure out what higher interest rates are going to cost you over the next cycle, until they are likely to fall again. My guess is that when people can see through to lower interest rates (as opposed to what they are now), they will pile back into the market, likely yanking property prices up again quite quickly (this won't happen for a while yet). The tax incentives are still there, and demand for rental accommodation is tight and getting tighter. A lot of people have squirreled away some cash over the last 2 years. I reckon they are waiting for their moment. Figure out how much of a debt you can cover at peak interest rates, and how much of a discount on property price you need to come out ahead. Then take your sweet time. As a buyer in this market, you hold the cards.
You aren't flipping houses, you said yourself this is a "long term investment". I'm here to tell you that house prices over the long term (10+ years) will increase, so what the market is doing on a day-to-day or year-to-year basis is irrelevant. Ignore what "the market" is doing and buy something that you like that you can afford.
why don't you go ask [r/realestateaustralia](https://reddit.com/r/realestateaustralia/) about it?
Man that's a dead sub, if ever I've seen one.
I thought you had to live in it for 12 months to avoid capital gains. We are looking to move to a bigger town and many agents are still trying to inflate the price. We looked through a couple and they say there are 2 offers in close to the high end. 2 weeks later that property is still on real estate for sale. Our broker also pulled up info that the property we looked at sat on the market for 5 months last year. Many agents still want the FOMO frienzied buying they had 6 months ago but there is much more caution now. Also 2 properties we looked at had offers removed as they couldn’t get the finance. I think if you want to buy make an offer you think it’s worth as I’m thinking things will change a bit more after tomorrow’s rate rise. We are just hanging back a bit at this stage and watching the prices. Some have dropped and some even listed as offers considered.
Waaaaiiiitttt The market has a hell of a lot further to fall