There are a lot of factors that come into play while buying a property starting from personal and financial concerns to the condition of the real estate market. Buying a home is a big decision and you need to be sure that you make the right choice. Apart from finding the right property, the next important thing to consider is when to buy.
Going with the common perception, people usually prefer to buy during the spring season. Spring is a bright phase of the year when people want to step into new beginnings. The bright sunshine and cheerful days of the spring season are accompanied by a bustling property market making room for a lot of choices.
However, buying in the spring may not be the best thing to do according to your unique requirements. Let us find out further how to go about deciding when to buy a new home.
BUY WHEN YOU’RE READY
January has been the busiest month when maximum people searched for houses and land packages online, according to listing websites. However, narrowing it down to a particular month may not be the best idea.
The wisest choice will be to take the plunge when you are truly ready. One needs to be prepared to drain out one’s savings and make sacrifices to make loan repayments. You will find good properties in the market at any time of the year if you are willing to do the research. Consider the following factors.
Personal factors
Owning a home will be a long term endeavor and you should be willing to stay for a few years to come. The property should be able satisfy your current and future lifestyle needs. You might be required to make changes to your lifestyle because of a cut down in your expenses and set a budget to make room for your home loan repayments.
Financial factors
Before making a move, figure out if you are in a position to finance a property purchase. Determine your weekly budget to see how much is left after all your expenses. If you find that you cannot afford the perfect home then it may not be the best time to buy.
The amount of deposit you have saved up has a remarkable impact on the kind of property you can buy and the amount of money you will be able to borrow from your bank. Generally, you will need to have a deposit amounting to 10% of the purchase price.
You will also find lenders who will be willing to finance your purchase in case of a lower deposit or those who will only consider if you have at least 20% saved. Lenders consider having a higher deposit as a sign of financial discipline and helps boosts your chance of getting a loan approved.
Market scenarios
Spring and summer are the busiest periods of the real estate market, so you will have a lot of options to choose from. But that would also mean greater competition in the form of potential buyers. During autumn and winter, on the other hand, there are less properties on sale which also means less competition.
Having an overview of what the real estate market looks like will help you make an informed decision. Refer to historical growth trends to help you figure out the market. Go ahead with shortlisting the suburbs you are interested in. Check the median prices in the suburb along with sales result and auction clearance rate to decide if it is the right time to buy in that area.
THE CURRENT SCENARIO
In 2015, August was the most favored month for property purchases. The early part of 2016 turned out to be a good time for first time home buyers and for those who want to upgrade to a new home.
Real estate prices have cooled down since the beginning of the year and home buyers are getting the best prices that the market has seen in years. Median prices were seen dipping in December last year across Melbourne, Sydney, Darwin and Hobart.
This does not indicate a property crash, but buyers are definitely getting a good value for their money. This scenario is coinciding with low interest rates. For home buyers who are looking for the perfect opportunity, 2016 is turning out to be a good time so far.
After the holidays, people often gear up to spend on a new property during the summers. Real estate developers act on this mindset during summers and come up with attractive prices and incentives. Post-Christmas sales bring some of the best opportunities in January and February.
OVER TO YOU
Before you set out for house hunting, it is best to consult your mortgage broker to have an idea of the home loan options available to you. Your mortgage broker can also help you attain a pre-approval. This will give you a clear cut budget so that you can narrow down your search.
Planning in advance gives you enough time to prepare yourself for buying a home. It also takes the uncertainty factor out of your decision so that you are sure of your budget while making an offer. That makes for the best time for any potential home buyer to take the plunge.