Perfect Time to Buy – No More Excuses

Perfect time to buy - Golden rules for when to buy

We’ve had a very different couple of years in 2020 and 2021 with Covid 19, yet the excuses around not buying property and continuing to sit on the fence hasn’t changed. The same ones come round every decade.

Many of our property markets have had significant growth in the last 12 months and some are now changing. Prices are still rising, but it’s not as hot or competitive as it was a few months ago.

So, these holidays could be the perfect opportunity to sit down with your partner, kids or parents and discuss which way could be the way forward in 2022.

I’ve been buying property for almost 30 years and have a pretty healthy portfolio which has seen some great gains. However, I still don’t believe I’m that clever and so I don’t try and time the market.

My golden rules are to buy when:

1) the bank will give you a mortgage
2) you can buy at a conservative valuation price and
3) you have enough cash buffer to get you through the next few years

I speak to literally hundreds of people each year and these have been the excuses that I’ve heard as to why others haven’t taken action:

2017 – the market is peaking and about to crash
2018 – why buy now as the market is going down and I want to pick the bottom
2019 – I can’t get a mortgage because of the credit crunch / Royal Banking Commission
2020 – Covid will crash the market
2021 – I’ve missed the boat as the market has already gone up too quick

In 2022 I bet a lot of people will be saying “the market is going to crash / interest rates are going to rise”.

There’s never a perfect time to buy

There’s never a perfect time to buy and given many people still aren’t confident enough to fly overseas just yet, you should have more time on your hands these holidays.

1) Put some basic numbers down on paper. What will a property cost you, what rent might you get if it’s an investment and how much will a mortgage cost each month? I tend to budget around 1% – 1.5% of the property value for property management fees, maintenance, land tax etc but that will vary for houses/units, new/old and which part of the country you’re buying in

2) Get on to a mortgage broker to see how much the bank will lend you as it might have changed recently with the serviceability changes due to APRA

3) Double check the recently sold properties on and to see what has actually sold and at what price. Try to just look to see what’s sold in the last quarter and you may still need to add 5% – 10% extra to get a good estimate of what it might sell for in early 2022

4) Double check those numbers and see what other reading you can do around the strategy of buying a home, holiday home or investment property so you’re well educated by the time the market opens back up.

5) Most agents and buyers agents will be on holidays but you may still find a few available and working (we’re still open!) and you might be able to sneak in a deal whilst everyone else is away

Well done on getting through 2021 and I wish you all the best for 2022.

This article was originally supplied to Century 21.

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