Buy now or wait?


With all the talk of interest rate rises and property market price declines, as a buyer you might be wondering whether now is the time to purchase or whether it’s best to wait.

Well, often that depends on your personal situation. But there are a few general factors to consider when it comes to what the market’s doing and how the interest rate rises we’ve encountered over the past year have flow-on effects.

So, let’s take a look at whether it’s best to buy now or wait.

It’s a two-sided coin

This year’s interest rate rises have had an impact on the property market after the heady price increases of 2021.

But that’s not to say all markets are operating at the same speed. In some areas, price increases continue, buyers are out in force and homes are swiftly getting snapped up.

In others, properties are still selling but not at the speed or lofty prices they did last year.

If you’re considering buying, the best tip is do your research and understand exactly what’s occurring in the specific location where you intend to buy.

But if you’re thinking it could be an opportunity to hold out for a bargain, it’s worth keeping the following in mind…

Some things to consider

A whole range of factors go into making a decision about whether now is the right time to buy, not least of which is the current financial landscape.

So, let’s decode a few flow-on effects of recent interest rate hikes and how they might impact your decision.

Borrowing capacity

While we’re not professing to be accountants or financial advisors, often buyers and sellers fail to appreciate that interest rate increases affect borrowing capacity.

That means while you might have been eligible for a high loan last year, this year the amount a lender will be willing to provide could be less.

And if the hikes continue, it will decrease further.

Feasibly if you wait six months, that might mean you aren’t in the position to buy the type of property you would like.

A little more cautious

As a flow-on effect of the recent interest rate rises, you might also be thinking it’s time to be a little more cautious about borrowing.

After all, if rates rise again that will have an impact on your monthly outlay.

Again, the best person to speak with here is your financial advisor or lender, but it could be worth revising your budget to ensure any mortgage is manageable now and into the future.

Will prices fall further?

If you’re banking on the fact property prices will fall further, the reality is no-one’s really sure of what exactly will happen next.

What we do know is this: during 2020 and 2021 Australian property prices in some regions increased 30 per cent, and now in some (but not all) markets prices have retracted 10-15 per cent.

That means prices are still 15 per cent higher on average than they were in 2019.

We also know in the long-run, Australian property prices show consistent increases, despite some ups and downs along the way.

So, what’s the answer?

In any market, people still buy and sell property, but ultimately whether now’s the right time for you to purchase is a personal decision.

If it’s something you’re keen to do, we would strongly suggest reaching out to a local, trusted agent to see exactly what your market is doing right now, and speaking with your lender or financial advisor to assess your personal financial position.

Looking to buy or sell?

If you’re considering buying or selling a property, why not chat with one of our friendly agents on 1300 438 439 to understand the state of play in your local market?

We’re not just about property, but the people and the stories behind it. You can also view our list of currently available properties here.