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Should you wait out the property boom before you buy?

There’s no questioning that the property market is hot right now. Home values are growing at the fastest pace we’ve seen in years, auction clearance rates are up and we’re seeing buyers of all sorts rushing to take on a new mortgage. 

So is now the time to jump in too for fear of missing out, or should you wait to see if things slow down in the months ahead?

The gamble of waiting 

Inevitably, the buying frenzy we are seeing at present will settle down at some point – but when and how is impossible to predict. 

It could be that we see property prices continue to climb as long as interest rates remain at record lows, which will probably be for a while considering the RBA has all but promised that we’re likely to see interest rates stay where they are for the next few years at least. 

But even if the RBA doesn’t change rates there are other things that could slow the market down, such as an intervention from the Australian Prudential Regulation Authority (APRA) or an out of cycle lift in rates from lenders themselves. 

It’s also possible that high property prices could force a lot of potential buyers to take a backseat, which would help take some heat out of the market. 

On the flipside, there is just as much possibility that things could escalate further before we see any improvements, particularly if we keep seeing a low level of housing stock or we see Australia open its borders, which could result in increased participation from overseas buyers. 

It’s impossible to know for sure which direction the market will take, but ANZ have predicted without interventions that national house prices will go up by 17% this year. 

They have also predicted that some kind of intervention will take place next year, which will see growth slow down to 6% in 2022. 

Growth might slow, but prices unlikely to go backwards

It’s important for potential buyers to keep in mind that even if the market does slow down, it doesn’t mean that prices will go backwards. If the market moves in better favour of buyers you may however find it easier to predict and negotiate property prices, or there could be more variety of stock on the market, as properties won’t get snatched up quite so quickly. 

What should you do?

At the end of the day what happens in the property market is out of our control, but if you’re ready and willing to buy then there’s no time like the present. 

But, don’t feel the need to rush in and make a purchase just because everybody else is. 

When the market is booming you still need to take your time and be sure to do your due diligence. Try not to let the competition in the market pressure you into buying something before you’re ready – if a property doesn’t meet your standards then it’s worth waiting for the next one, even if it might take a little while. 

If you’re starting to get disheartened by how long it’s taking to find a property then it won’t hurt to take a short break from looking at properties and to reassess what you want in a few weeks time. 

Searching for a property can be hard work and when the market is tough sometimes you need to take a little break from it. 

But remember, if it does take you a while to find a property that you can use this time to continue saving for a home loan deposit. The more you save, the better quality of home you’ll be able to purchase so if you stick it out and keep looking, you’ll eventually find a home that is just right for you.

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