Buying property in a downturn

21.02.23 | Michael Brown | News

At the time of writing, the media is full of stories about the impending ‘mortgage cliff’ – a very real situation where people who locked in fixed-interest loans are about to see large increases to their monthly repayments.

From an average rate of just over 2.1% back in 2020, Sydney owner-occupiers will likely see rates of over 6.2% by the middle of the year. Ouch!

Not all doom and gloom

While those who entered the market a few years ago are facing an uphill battle, those who are getting ready to purchase soon shouldn’t be scared away.

In Australia, property remains a solid long-term investment. Demand for property remains strong, despite rising rates, and as migration increases over the coming years, we can expect a market bounce-back.

People like living in Sydney. The state government keeps releasing land on the outskirts, and apartments keep springing up closer to the centre of the city.

When to buy

American writer Mark Twain famously said, “Buy land, they’ve stopped making it.”

But in an uncertain market, it can be hard to know when to enter the property market or pick up your first investment property.

At Mortgage Broker Sydney, we think the answer is simple: If you have a deposit and your debts are under control, buy when you can.

Some experts think the market will fall further through 2023. Some say it’ll plateau soon. Or it could even increase. But purchasing a place to live is not a card game. Buying property is a long-term proposition. There are no guarantees that in 5 or 10 years’ time your property will be worth more, but 230-plus years of property wheeling-and-dealing in Sydney tell us that it’s a reasonable assumption.

Plus, of course, buying a property isn’t just a financial investment. It’s also an emotional one: an investment in security, belonging, family and happiness.

Waiting for prices to “bottom out”

As interest rates have increased over the past year, there has certainly been an impact on the price of property. The runaway train has slowed. It’s tempting to wait until the market hits the bottom. When? Who knows.

And when it becomes clear that rates have stabilised and prices are ticking up, everyone who has waited will be out looking to snare a bargain at the same time. Property values will only go one way if this happens!

Talk to us – it’s free

The property market goes up and down, just like shares, currency and petrol. If you’re looking for short-term growth, property is not for you. If you’re looking to find a residential or investment property to hang on to for a while, we can help.

Contact Mortgage Broker Sydney today. We can help get your finances and paperwork in order, assess properties you might be looking at, research different loans that suit your circumstances, and even help lodge loan applications.

We also have access to loans that aren’t advertised by the banks, and we have a legal obligation to always work in your best interests.

And probably best of all, our service is offered at no cost to you. Ever. (Lender fees and charges may apply).

Talk to an expert who is on your side.

Contact us today.