For years, home owners have been counting our lucky stars. Until now. Prices are swirling downward. It’s being predicted that there will be some serious shivering this year. Melbourne and Sydney face drops of another 15%, Perth 7.6%, Adelaide 3.2%, Canberra 1% and Darwin 0.6%. Only Hobart, with expected gains of 4%, is defying gravity. But if you’re on the hunt for property, here’s five key tips:
Get finance early
The property boom is over and so is quick, straightforward finance. Approvals take longer and banks are lending less. If you find your dream home, you’ll want to celebrate—not suffer anxiety hoping for your loan to be given the thumbs up. Indications are that banks are favouring recently renovated homes because there are less variables to consider, so keep that in mind. And, most pre-approvals expire within 3-6 months, so you need to get to it.
Research your target suburb/area
Once you find an area you like, research the latest median prices, market data and local demographics. Know what is planned for the area — public transport upgrades, planned high rise, new schools.
Does it tick your boxes?
Make sure the property meets your needs, but be realistic. Can you fit your family in the bedrooms? How far are you from public transport? Is the freeway too close? Is there a beach down the road? What are the growth prospects? If it’s your first house, it doesn’t have to be the ‘dream home’. Start small, buy what you can afford and go from there.
Take a long-term view
Long term planning is key to home buying in a slow market, and this slump is just getting started. It’s being said that things won’t improve for ages so, move in, renovate, get a pool or a granny flat, whatever; but maybe sit tight. Sell when prices bounce back. On the other hand, if you’ll be flipping the property soonish for profit, see below for some investor strategies.
When investing, look at the big picture. What’s the economy doing and where are we in the property cycle? Select the right market—usually in a capital city—and preferably one that’s bottomed out or growing strong. Then find the right suburb—generally where locals have higher disposable incomes, or where renovation is happening. Examine the last ten years of growth figures to confirm trends. Pick the spot in your chosen suburb close to everything that makes property valuable—transport, lifestyle etc. Finally, pay what you know is a fair price.
Buying a new home is a big decision. The last thing you need to worry about is getting finance. Get in touch today and leave it to me!