Is now the time to buy??
Interest rates are low,
Rents are up,
Rental vacancy rates are low,
Property prices have flattened or levelled.
It seems a good time to buy if you are in a position to.
But when can we expect interest rates to rise though?
If property prices fall further, will that include lower end of the market properties?
With many job losses predicted and happening, people will still need a roof over their heads.
Wouldn't properties in the lower end of the market seem more in demand for people in financial trouble (to rent or buy) ??
A lot to wonder about,
What do people think??Frosty
Absolutely NO, 2009 is not the time to invest in property, You will find it will be loosing value for several years.
Frosty,
It depends on your investment plan. If looking at B&H for a number of years then make sure it is CF+ as prices in general appear to be flattening out except in the high end of the market that has seen some decent falls. You only loose money from prices falling if you sell. There are areas that are still experiencing good growth in prices and rents. It can be a good time to B&H long term if CF+ as some people will panic or be in a position to have to sell cheaply due to unexpected circumstances.
In my experience properties in the lower end of the market normally rent out a lot quicker and easier and are also the first ones to start the rise in rents as more renters look for cheaper accommodation and then this flows onwards. The current economic situation might see things change and I have no predictions on which way things will go.
You don't want an upside down mortgage, they are not a good financial strategy, Especially if something happened to go wrong… That's why I said in a previous post that during the next few years some will prosper and some will loose everything they have.
We are experiencing a time of great wealth redistribution, I predict that while western living standards start to fall, Asian living standards will increase dramatically over the next decade, Mistakes you make now could set you in a devastating riptide in the near future.
Frosty 1
Now is not the time to buy. Sit back and take in what happens over the next year or two. Let the downward swing settle, then maybe if the economy finally turns, then maybe think again about property.I agree with C2's ideas and some of hbbehrendorff but I don't want to argue against them since everything is so uncertain at the moment. Even the experts who have all the resources can get it wrong, human nature has a habit of doing the opposite to logic.
I personally have not purchased for 3 or 4 years, I have been paying off loans etc so now can buy anytime, BUT it is not the time and PROBABLY not property for many years if ever, the boom times are over dead gone never to return, at least for the forseeable future.
Hey Frosty1, I think now is the time to buy (especially in Sydney)
you said it yourself rising rents, low vacancy rate, low interest rates (which are still dropping)
what more do you want ??
Im still buying Ive just brought 2 more apartments one in December and I exchanged on another one last friday (I now have 7 IPs all brought in the last 2 and half yrs) with Sydney rental yield and these interest rates im cash flow positive, and when interest rates head up again ill lock them all in.. Ive used mostly 5% deposits and Im using a buy and hold strategy
its time in the market, not timing the market..
all the best
I wouldn't buy now even though most of the fundamentals appear to be there. The "smoker" is unemployment which will make things even worse than it is now. House prices are likely to deteriorate over the next year so why not wait a bit longer when interest rates are going to go over even lower.
Frosty buy for all the reasons you listed, there will always be a reason not to buy. Just watch that the holding costs are well within your budget.
I think a outright NO is too strong. There are bargains out there that may be cashflow neutral or better and not suffer badly in a slump. People say wait a few years for things to get real bad. But if this happens will you be in the position to buy then. Will you have a job. It is a lot harder to buy a cashflow property on the dole than it is to keep it.
Im not saying go buy a Ip if you are about to loose your job but everyone says wait for the worst but this will possibly mean higher unemployment and maybe less equity to borrow against.This may be the best time to buy buy will you be able too. Thats why i guess they say buy when you can.
Don't listen to the 'prophets' who have predicted a 50% loss of value in median prices. There are plenty of areas where growth is predicted for the 2009 year. See Fridays Fin Review. Like you say, yields are high an interest rates are low, and you can get good growth in some areas. Just do your homework before investing.
And pay no attention to the losers on the GHPC forum, which, incidentally, doesn't seem to be working anymore. Another conspiracy, perhaps!
Its always good time to buy, unless you have better investment plan. Now is the time to get a bargain which you wouldn't normally get in boom time.
I hadn't planned to buy but I did. I saw a bargain, went for it before it got on the market, and got it. Have tenant signed up and we're not even at settlement yet. Rent yield 6.8%. Great location.
Plan is to lock in interest rates after the next drop next month. Not sure for how long.The key, as always, is being confident about your research (both of the market and rental demand) + being able to service the loan without sleepless nights.
Find an area, know it inside out, find a niche style of investing (eg: reno and rent, multi-letting, whatever works for you and you ENJOY) and then get out there and look, not just on RE.com but pound those pavements.
Property investing should be fun, like a game of monopoly. Different tactics in different times.
I think many of those who continually prophesize doom are secretly harbouring regrets that they missed the boat in the past. But there's always time to get in. And, sure, there are many people who got caught up in the boom mentality and overstretched themselves. But if you read widely and do all your due diligence you won't be one of them.
cheers,
Carlin
If you wait patiently for a nice bargain a development block for example you can pick one up for a good price. As long as you don't borrow more than you can afford. factor in rate rise of 2% above what you could afford and if it is okay and you can manage go for it. But don't get greedy and borrow more than you can otherwise you will be stressing out.
Remember it is a marathon not a race to purchase assets for the future.
Het frosty, if the deal is good it's always time to buy. just do the research.
I'm with investorswitch, carlin, reistar, diggerdigzit and posenterprises — it definitely IS a good time to buy!!
- Housing is more affordable that it has been for years!
- Rents are going up
- Interest rates are going down
- Investors (in NZ anyway) all seem to be asleep, waiting for the "bottom"
Problem is, how will you know when we are at the bottom? You won't actually know for at least three months AFTER we've been there and prices start to rise again. And we all know what the banks do when the economy starts to look better; they put their interest rates up!
I'm with the BUY NOW team!!
Vicky
I would rather wait for the next 6-8 months to see the picture…. very temptating to buy…. but who knows about the future…
rental yield in sydney is more than 6%..hardly seen postive cash flow in syd market for many yearssssssDunno guys, my crystal ball is definitely indicating "buy now"
frosty1 wrote:Is now the time to buy??Interest rates are low,
Rents are up,
Rental vacancy rates are low,
Property prices have flattened or levelled.
It seems a good time to buy if you are in a position to.
Depends of where are you buying, the price range you are looking to buy, are buying to rent it out or live in it yourself, is your job reasonably secure, etc.
Quote:But when can we expect interest rates to rise though?
You could ask the experts but after the last time ….
Quote:If property prices fall further, will that include lower end of the market properties?With many job losses predicted and happening, people will still need a roof over their heads.
You've answered your own question, people still need a roof over their heads and buying a low end property is getting cheaper then renting.
If you have done your due diligence and everything adds up,
IT IS ALWAYS A GOOD TIME TO INVEST IN PROPERTY.
The time to buy is always when you find a deal that you can make money from. As jparry said – do your due dilligence. If the numbers stack up then its time to buy. Its what you will buy that is probably different at the moment. Rather that aiming for capital growth perhaps look at renos or conversions where you can make good money up front
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