Recent news that property prices have been falling in Australia’s capital cities may have been welcomed by first home buyers waiting for the “perfect” time to buy. But with further falls forecast for the future, how can you be sure when exactly it’s the right time to buy?
Reports from Domain and CoreLogic show that property values in Australia’s capital cities and regional areas have been falling this year. According to CoreLogic, property values in every capital city but Hobart have fallen since their peak, and these declines are expected to continue over the upcoming months.
|City||Change in dwelling values from market peak to Mar 19|
|Regional Tas||At peak|
CoreLogic Australia head of research, Cameron Kusher, said that lower housing values are becoming more attractive to first home buyers and prospective buyers who were previously priced out of the housing market:
“With advertised stock levels remaining high and mortgage rates tracking around the lowest level since the 1960’s (and potentially moving even lower later this year), active buyers are back in the drivers seat to take advantage of improved housing affordability and the low cost of debt.”
So, how can you tell when it’s the perfect time to buy a house? Unfortunately, there’s no easy answer.
Recent trends and past history can indicate what may happen to the property market in the future, but nobody has a crystal ball that can make financial predictions with 100% accuracy. Even if market conditions seem pretty good at the moment, you can’t control what the property market does, and things could be much better or a lot worse this time next year, depending on who you ask.
Rather than waiting for the property market to change to suit your finances, another option is to get your finances in order so you’ll be ready to apply for a mortgage at whatever time best suits you.
Some ways you can get ready for a mortgage include:
- Saving a deposit – The more money you can put towards a deposit, the less you may be charged for Lenders Mortgage Insurance (LMI)
- Consolidating and/or clearing your debts – Paying off outstanding personal or car loans and cancelling credit cards you don’t use can help banks see that you’re a responsible borrower
- Getting your documents together – Lenders often want to see evidence of your income and savings, so collect some bank statements, payslips and similar documents
- Checking your credit history – Australians can request one free copy of their credit report per year, so consider checking whether there are any errors on your credit file
- Considering a guarantor – If you’ve had credit problems in the past, or can’t afford a large deposit, you may be able to ask a relative to guarantee your home loan
- Doing your research – Use comparison websites such as RateCity to learn more about what home loans are available, and which options may best suit your needs
- Getting professional help – Consider contacting a mortgage broker in your area, who may be able to provide financial advice specific to your situation