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Infolio

The Cost of Waiting To Buy

19 July, 2017 / Category: News

When discussing real estate around the watercooler of late, you may have heard people referring to the property market as ‘too hot’ or ‘ready to burst’.

It’s possible you’ve heard people bragging that they can ‘time the market’, waiting for prices to flatten or drop before they buy. In short, they’re hoping to grab a bargain – but only when the timing is right. In today’s Infolio blog, Director Lauren Staley explains why waiting on the never-never comes with a heavy price-tag.

Thinking that Australia’s property market crash is inevitable? Strategising that you’ll wait ’til real estate prices fall? Unfortunately, all that sitting on the sidelines waiting to finally buy a property may be costing you in the long run. Patiently waiting for the market to drop, the ‘housing bubble’ to pop, or property prices to fall back to a more ‘sustainable level’ may mean you are locking yourself out of Melbourne’s best available real estate – or the perfect property for you.

Hoping for the property market to fail is counter-productive, as wages aren’t increasing at the rate of property values. Resulting, lending will continue to tighten as banks further protect their positions – making it harder to get loans, not easier. Currently, Melbourne’s median property price is at a record high of $826,000. This has increased by 7.5% in the first quarter of 2017. In real terms, this means that the costs to Melbourne’s average buyer have increased by $55,000. Comparably, wages are increasing by a rate of 2-3%. This means that the longer people wait to buy property – betting on a market collapse – the harder it becomes for them to gather the finances necessary to achieve home ownership.

Let’s break that down for July 2017:

Median Property Price Melbourne: $826,000

Deposit: $165,200 + Stamp Duty: $44,630 = Funds Required to Purchase Property $209,830

If housing prices increase by a further 7.5% over the next half (rather than quarter), the Melbourne median property price will reach $887,950. This means that the funds required to secure an average Melbourne property will increase by another $15,737 this year.

If you’re still thinking of ‘sitting pretty’ – I’ll bring this point home by reminding you of Infolio’s story. We opened our doors during the GFC of 2009 (to many peoples’ surprise!) – and even during that period of absolute fiscal crisis, housing prices didn’t drop – they simply flattened. Experience shows us – time and again – that if you are buying to hold (no matter how the market moves) you will ride out the economy’s peaks and troughs.

At Infolio, we look forward to empowering you to move beyond timing the market – and into a perfect property that will secure your financial future and your lifestyle. Can you really afford not to?

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