First National Real Estate Lakeshores Blog - Central Coast and Lake Macquarie

IS NOW A GOOD TIME TO BUY PROPERTY?

Ah, the age-old question that every first home buyer wants the answer to – is the property market too hot right now? Timing is only a part of the equation when buying your first home, so it’s a great question to ask, however the answer is far from straightforward.

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Timing refers to not just external market factors, but also to your own personal circumstances. If the time is good now - personally and financially - for you to buy property, then you should take that opportunity. The property market is of course a factor but the truth is, any time is a good time to buy, as long as the three key elements of property, location and price are aligned.

But before you find the perfect property. It’s good to know the basics of how the property market works (if you don’t already). At a fundamental level, it follows the rules of supply and demand. If everyone wants a house and there aren’t many houses, the houses become more valuable and vice versa – see, it’s easy!

Well, actually, there’s a little more to it than that. Property values are also impacted upon by things like the number of established properties compared to new properties being built; major projects and infrastructure developments; economic factors such as fluctuating income levels, interest rates and the impact of natural disasters; and of course, the behaviours of buyers and sellers. A shortage in properties for sale will drive values up and a drop in purchasing patterns will drive prices down. In addition, global factors such as political instability and financial crises can also throw some curve balls into the mix.

Prices will increase and decrease based on a combination of all of these factors, with a period of stability somewhere levelling things out, before the cycle begins again. The markets also move in different cycles from state to state and things like major projects and infrastructure developments can dramatically impact on a cycle and, as a result, the market.

So, is 2017 a good time to buy property? The best way to keep on top of this is to do your research – follow the news and chat to the experts. Making contact with a local real estate agent to get a good overview of what stage of the cycle your local market might be at, currently, can be extremely informative.

Basically, if people aren’t buying you have more opportunities for a good deal, but if the opposite is happening you will have a lot of competition to buy, which drives prices up. There are a whole range of strategic theories about when to get in and when to get out, but if you actually focus on the investment potential of the property in the long term, your interests are best served.

If you find a property that checks out as a solid investment in a great location for a decent price, then external factors may not come into your choice. However, understanding the mechanics of the market will certainly help you to know how the market may affect your investment, immediately and in the longer term.

Knowing what the capital growth potential of the property is, how easy it will be to maintain and tenant - if applicable - and that there are decent tax advantages to the investment will mean that for you any time will be a good time to buy property.