When is the Best Time to Buy a Property?
Buying a home is not a decision you make overnight. There can be many reasons as to why you want to buy a property and what you want to do with it. Once you’ve got your reasons set for a property, another question arises; When is the best time to buy a house?
Timing is everything. Correctly timing your purchase will allow you the ability to snag a great home that is perfect for you. Then again, when is the best time? Well, the answer really depends on you. You have to decide when the right time to buy a property is for you. And to determine that, you need to understand the 4 important wheels that you are subjected to in life.
Wheel 1 – Your Body Clock
This is your biological clock. After the age of 25, your body cells start aging as you get older. When you are above a certain age, health complications are often a given. Whether or not you buy a property, or you decide to live in Australia or somewhere else, your body follows its own biological clock.
Since you are borrowing money to buy your property, you need to ensure that you’ll be able to repay it. In principle, a loan is borrowed for 30 years. Being far-sighted is crucial when you take on a mortgage. As the loan repayment period progresses, your body will also go through change. Your body will not be as strong as it is now. When you consider buying a property, your body should be able to support that responsibility. Time your purchase with the result that in the long run, the ticking of the biological clock would not leave you incapable of paying back the loan.
Wheel 2 – Your Life Stage
The stages of your life and their corresponding needs comprise the second wheel. Buying a home should align with your life goals. You travel to Australia as a student exploring opportunities and one day become a PR or citizen. As life happens, you’ll go through marriage, parenthood, taking children to schools then to high schools, and old age as you’ll find yourself in a nursing home snugly getting on in years. Regardless of whether you buy a house, reside in Australia or not, this is the trajectory life takes.
Ruminate on which stage of your life you are in and what your needs will be in the next five years. You will then be able to determine whether buying a property will satisfy these needs.
Wheel 3 – Economy
Before embarking on the home buying journey, the economy is another wheel you need to understand. Economic forecasts vary periodically, and the market fluctuations are inevitable. The economic cycles are affected by too many macro variables that are out of your control. Depending on the assets you own, the consequences of the ever-evolving economy on you can be significant. These can impact your financial situation as well as the costs of buying (and borrowing to buy) a home. These are things that cannot be controlled.
The best time to buy a house is when you are certain of your income and its stability. The mortgage rates and home values are almost impossible to predict, and economic shocks are inevitable. So, the most you can do is to plan ahead for potentially catastrophic scenarios.
Wheel 4 – Lending Cycle
Since most of you are borrowing money for buying a home, the lending cycle has an impact on your property purchase needs. Banks and lenders can tighten their credit policies from time to time which is contingent on the current property market conditions and regulatory climate. It is their money, after all, so they call the shots when deciding how they want to lend to you.
Banks are not waiting around for anyone to buy a house or borrow money from them. They are very strict and demanding when it comes to whom they lend. Banks have their targets set and systems in place. Sometimes banks may require only a 5% deposit while at other times they may require a deposit of 20%. They at times accept casual income and sometimes they don’t. Your best time to buy also hinges on the bank’s approval to lend you. If they are willing to lend you, this shows that they are confident in your income and your ability to take on the financial responsibility.
The above four wheels continue to move at their own pace, independent of each other, and the truth is, none of them is in your control. You can only prioritize them according to their importance to you at present. Understanding these four wheels will guide you to recognize your priorities and wise choices you can make to achieve your dreams.
All things considered, the decision is yours to make. If you ask us when the best time to buy a house is, it's when you’re sure that your body is capable of working for loan repayments till the end, you can meet your present and future life stage needs (such as marriage, childbirth, career), the economy will support your employment and the lenders have no doubts about lending you.
If you’ve decided to buy a property, then working with a mortgage broker you trust will give you more confidence and smoothen out the process. Ready to get started? You can start your home buying journey with CAPKON right away!