Hey everyone,
Have been a reader for a while but just signed up, great source of info!!
Just after a bit of advice,
My long term girlfriend and I are looking at buying a 2 bedroom appartment to live in in Ascot Vale or surrounding suburbs. We are looking at spending around $350,000 for 2 bedroom, one bathroom and one car space. We have been going to auctions and even put in bids but they are all going approx. %10 over the "on the market price."
I'm getting different advice from people, some say to wait because low interest rates and the first home buyer grant finishing are pushing properties around the $250,000-$400,000 up too much. Other say if you're in it for the long run and you're going to live in it (which we are) then its never a bad time to buy, even if I pay $20,000-$25,000 over the "on the market" price.These have been at auctions, I would prefer to buy private but that cuts about %80-90 of the market that im looking at out and nobody is selling before auction because they are getting these high prices at auction.
Any advice would be greatly appriciated.
Cheers,
ShannonHi Shannon,
My advice (for what it's worth) is to buy something soon even if it might appear a bit above the market price (sometimes this is quite hard to determine) especially if you intend to live in and keep it for the long term. I bought my first home in Brunswick in 2002 and thought I might have paid a bit above the market price at the time but was determined to get in the market while I could. I have never regretted doing that even if I might have paid $30-50K over (I paid $350K). It was worth doing this to get into the market at that time. I sold that house 5 years later in 2007 and it had jumped in value (sold for $580K and we'd done very little to it). For the last 8-10 years I have watched friends hesitating around the edges of the property market waiting for a bargain but reluctant to jump in and take the risk. Some have really regretted waiting so long and now no longer can afford to enter at the level they once wanted to.
My point is you can wait and wait for the 'right conditions' to pick up an apartment at the 'right price' but that may never happen. So what's a little over the market price compared to knowing you've got your foot in the door and that hopefully, over time, your home will continue to increase in value?
Thanks for the advice,
I had that opinion aswell but wanted to talk to some people that have property experience
Shannon,
I don't think the market is going to slow down for the following reasons:
1. FHBs are back to their 'normal' levels of approx 20% of the market and yet prices continue to rise
2. We have seen a steady increase of upgraders back in the market. Some months ago there were very few upgraders & some investors were dumping stock onto the market that was purchased by FHBs. But there are lots of upgraders who have sold to FHBs, now supporting the middle and higher end of the market
3. Investors are making a re-entrance into the market. Recently published surveys have 3 out of 4 investors who intend to purchase, waiting for the boost to expire.
4. The threat of interest rate (IR) rises are seeming to be having the effect of bringing forward investment purchases. Lenders' serviceability calculations are done on present IR + 2% – so, “better to get more funds now while standard variable rates (SVRs) are at their low point”, seems to be a theme we’re hearing.
5. People who were held back by fear because of media reports or people like Prof. Steve Keen, now see the folly of expectations of 40% falls. They are now facing the reality of paying 10% more than they could have paid, 6+ months ago.
6. While-ever the share market is volatile, people retreat to the relative safety of bricks & mortar.
7. Unemployment is not expected to get to the levels predicted. Gee – we did not even enter a 'technical recession' while the global financial markets were in meltdown.
8. Demand is still exceeding supply. New housing starts are still weak. This pushes up prices of existing stock.
9. Immigration still high, etc. etc.
I think the longer you wait at the moment the more you'll pay.
Thanks,
Some good points that make a lot of senseShannon,
Have you considered buying off the plan to save on stamp duty? There are some developments in Brunswick (just lookout on Realestate.com.au) that are nearing completion. You can expect to pay around 350K-375K.
Another option is to step out a little and consider areas within 6-10km of the CBD for the price you are after.
AM.
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