We constantly hear on the news about how the property market is a great asset, yet honestly, how many of us actually understand what we’re purchasing for ourselves?
Let’s get real, how many of us actually remember our economics lessons from school? High risk vs. reward – did anyone else stare off into space?
The truth is, however, that they were probably some of your most important lessons for the real world, especially if you’re now a homebuyer. So, how do we put it into words we all understand?
Boom – it’s a good thing right? Therefore, the end must be bad. Actually, no.
When one hears the end of something, we often panic. The thought of a property “boom” makes us think it is a good thing, and that the subsequent end is something that is bad. However, for a buyer, it’s actually the opposite.
Time to Buy!
A property boom makes the prices rise, so not great if you want to buy right? In addition, if you want to buy, you want prices to be low, so the end of a boom means you pay a lower price, and less interest.
With the rise ending, now is a great time to consider buying, as you have less to pay on stamp duty and the mortgage.
Savings, Savings, Savings!
So we all know what the mortgage/home loan is, but when making this big purchase, there’s often a sneaky little cost that gives us a surprise. His name – stamp duty. What is he I hear you say?
Tax, people – that’s what it is. Stamp duty is the tax you pay on the land on top of the house price.
So falling prices from the end of a boom mean a cheaper loan and less tax – isn’t that what we all want? A little money back in our pocket.
According to Australia’s ABC News, “…If you want to make a sea change or tree change, you can afford to live pretty much debt free.”
Furthermore, this also means a drop in price on packages, which means fewer expenses to repay to a developer, meaning more chance to pay the loan off sooner.
Getting your foot in the door:
Now there is no denying that saving for a deposit on a house can be a difficult accomplishment. However, prices falling make this a little easier.
According to realestate.com.au. The best places to buy right now are in Perth and Darwin, where interest rates are low and affordability is in a good range.
East Coast Living:
If you are looking to live on the east coast and close to the bustle of our populated cities, the end of the property boom is making it a good time to start looking in Sydney and Melbourne.
According to an article by Chris Pash in Business Insider, “the resurgence in prices is likely to be short lived …even fall in the next two years.”
This will make land prices more affordable in our most liveable cities, particularly if you’re someone who is more into apartment living, with the prospect of median prices by 2020 being $1,150,000 in Sydney, compared to $1, 2oo, 000 last year.
Now, while it may seem a little way off yet, if you’re a potential buyer, the prospect of owning your own property may not be so far away for you after all. Happy Hunting!