As housing prices continue to decrease on the whole across Australia, many first-time homebuyers are wondering if it’s time to finally claim their piece of the Australian dream. But there’s a myriad of factors to consider besides just the market itself.
Timing the market
While it’s important to keep an eye on housing prices in your area, trying to time the market just right can be tricky. It’s anyone’s guess as to what will actually happen. So, while housing prices are declining, it shouldn’t be the only factor you consider when buying your first home.
According to Michael Yardney, one of Australia’s leading experts in wealth creation through property, “rather than trying to time the market, if you’re a homebuyer your family needs should really dictate when you buy your property.”
Getting your finances in order
You’ll want to make sure you’re financially ready before you take on the responsibility of a mortgage. And once you have your finances worked out, you’ll much closer to deciding if now is the right time for you. But what does that actually entail?
One of the most important things you’ll want to understand is how much you can actually afford. As a rule of thumb, you don’t want your mortgage repayments to be any more than 25-30% of your monthly income. To get a better idea of what this number looks like, try using a mortgage calculator.
You’ll also want to make sure you have saved ideally 20% of the total cost of the home for your deposit, in addition to legal costs and home loan establishment fees which can range anywhere from 2-7% of the total home cost.
A little homework will go a long way towards ensuring you’re ready for the next step.
Picking the right time of year
The time of year is also something to consider when purchasing your first home. The summer season generally has more inventory, but this also means more competition for you as more people will be out searching as well.
Autumn and winter tend to slow down as the weather gets cooler, which often means more negotiating power for buyers. If you can afford to wait, you may be able to score yourself a winter deal.
Your family’s timing
Even if you have your deposit saved and you’re feeling better about the market, you’ve got to decide whether it makes sense for your family to buy right now. Are you ready to commit to the area you live in and a steady stream of mortgage payments? Are you willing to stick to your budget and have you built up enough savings for a rainy day?
Owning a home can bring a wonderful sense of security and peace of mind, but you need to make sure it’s something your family is ready for too.
If you’re saving for a deposit, looking for pre-approval, or need support on your home ownership journey, we’re ready to help.
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