There’s no hiding from the seemingly grim headlines at the moment; the Reserve Bank of Australia (RBA) raised its cash rate yet again this month to 25 basis points to 2.6%, and CoreLogic reported a further fall in housing values through the first month of spring, with the national Home Value Index (HVI) recording a -1.4% decline in September.

So, what should you do?

Is this the time to buy an investment property, or should you wait a bit longer in anticipation prices will fall further?

Should you sell your home to buy a larger house?

And what about first home buyers? Should they start looking now or wait to see what happens?

Here are our thoughts:

Why you shouldn’t time the market

Hindsight is great, isn’t it? Two years ago, at the start of the pandemic, with uncertainty around jobs, many experts were predicting the market would fall… instead prices went up.

Those who bought a property at the start of the pandemic hit it lucky, just as those who sold at the start of the pandemic may well be wishing they’d held out for another year or so.

The truth is, the market can never really be predicted, and there is never a perfect time; the market is always going up and down.

All things being equal

While house prices are falling, interest rates are rising.

Some lenders are holding back on mortgage deals, so for those who need to finance a property, if they wait too long, they may not be able to borrow as much when they eventually decide to buy.

Furthermore, if buyers don’t have to sell immediately, and they aren’t getting the price they want, they will take their property off the market – meaning there are less properties to choose from.

From a property investment point of view, remember there are ways to legally minimise your tax if the right ownership structures are in place. When reviewing budgets, this may offset some of the costs associated with rate increases. Speak to a financial specialist for advice on your situation.

Buy when you’re ready

Regardless of what the market is doing, what you really need to look at is your financial situation, see how much you can borrow, factor in all the risks, speak to a financial specialist who can advise on tax-deductible expenses, and then make the decision as to whether or not you can afford to buy an investment property.

The main risks you’ll need to factor in are:

• Further interest rate rises
• Unexpected job loss, or other changes in financial situation, such as unpaid maternity leave

If you have reviewed your finances and tax implications, can get a mortgage at a manageable rate, there are properties for sale in your price range, and you have a financial buffer to see you through the unexpected, then now is the time to buy!

Property has always been a long-term investment. Whether you’re buying an investment property or a home to live in, the main thing to remember is, you’re buying an asset which you are paying off.

If you buy a home to live in now, after a few years, you could have equity in the house you can use to buy an investment property later down the track.

We do more than simply manage and sell properties; we try to give you information to help you make informed decisions when planning for the future. We’ve helped thousands of people realise their financial goals through property, and we’d like you to be one of them.

If you want to know more about our services, give us a call on 02 4954 8833 or pop into our Cardiff office for a chat. Or send us an email to: mail@apnewcastle.com.au – we’d love to hear from you.