Should I buy a house now or wait?
According to the Central Statistics Office, property prices nationally have increased by 123% from their trough in early 2013.
That sort of growth can’t go on forever. Increased interest rates are likely to have a knock-on effect and limit growth to a more a sustainable level.
This might have some would-be purchasers worried that they’re buying at the wrong time. Are prices about to go down? Should I buy a house now or wait?These are the questions that can keep new buyers up at night. But let me reassure you. The only factors that should be driving your decision to buy are personal needs and affordability. That rule applies no matter what the market is doing.
While your home is indeed a financial asset and for most people, it’s also their biggest store of wealth. So, it would be great to time your purchase perfectly to maximise your capital gains. But the reality is that no one can pick the top or the bottom of markets – even the professionals.
A home is a home, first and foremost, and a financial asset second. So, let your personal needs guide you. Need to upsize for a growing family? Need to downsize because the kids have left home? Go ahead and do it. Market trends really don’t matter. What does matter is holding for the long term.
If you do end up buying at the end of a growth cycle, then reality is you might need to wait a while to achieve some decent capital gains. But does that matter if you’re going to be living in your new home for the next 10 or 20 years regardless?
If you’re buying your first home, then chances are you haven’t yet seen how price growth in property really works. The market is not always this exciting, and growth certainly doesn’t occur in a straight line.
Over a typical decade, you’re likely to see one boom or strong growth cycle, which we’re in now; one slower period when prices can sometimes pull back; and a bunch of years where not much happens at all. Prices tend to grow at an average rate of 0-5% during these years.
That’s why you have to hold for the long term. You have to wait out those slower years in order to be rewarded when the next major growth cycle begins. That’s when healthy capital gains are made.
DNG Galvin have been in this business for 40 years and let us tell you, whatever you pay today is going to look cheap in 10 years’ time. That’s just how it is with real estate. So, forget market timing. Get the location right, only buy quality, keep within your budget, and most of all enjoy your new home.
Looking for advice when buying a property? Get in touch with DNG Galvin here. We have helped thousands of buyers just like you to secure their home. Would you like to be one of the first to be alerted about new properties to the market? Register to our database here
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Monday, August 29, 2022 in Blog