Just recently there has been a lot of talk about housing bubbles in Australia, but an article in news.com.au points out that this could be the time to find a good value property, provided you do your research.
Even though buying during a downturn is best, it’s still possible to find good value properties during a boom depending on the property cycle in your area. While the property markets in Melbourne and Central Sydney may be overheated, it’s not the case in most parts of Australia as prices are not at their highest point and haven’t yet returned to levels seen during the peak of the last cycle. Experts point out that if the price of the property isn’t as high as it was seven years ago then it isn’t at its peak.
During the first four months of this year real estate prices in Sydney increased by 14% and it’s fully expected they will break through the $1 million median mark pretty soon. However interest rates are still historically low and it’s never been cheaper to get a mortgage. The expert’s advice for finding something affordable in Central Sydney or Melbourne is to look for a smaller property or a different area. This does mean buying something that will be a bit of a compromise so under these circumstances it’s worth buyers doing their homework.
One thing to consider is whether you’ll need something bigger during the next few years as these types of properties may not have increased sufficiently in value to make it worthwhile selling. In this case you might need to rent out the property so make sure it will achieve a reasonable rental yield. Also, it’s vital to make sure you can afford the repayments and it’s best to lock in your finance for the next few years in case interest rates rise.
When buying a property it’s easy to get carried away, particularly if other buyers are after the same home. This might not be such a bad thing if you are buying a home you intend to stay in for many years to come, but it’s better to walk away from an investment property or a first home rather than being sucked into a bidding war. When deciding if an area represents good value for money, look to see the level of recent price growth, and whether any areas are undergoing urban renewal or are the subject of new infrastructure investment which would help boost the desirability of the property.