As mortgage brokers who treat our clients as more than just a number, we gain a lot of insight into what drives the marketplace. Our office is in Rockingham, but we broker a lot of home loans in Kwinana and Baldivis too. We talk to a lot of people in all of these markets and one of the most common would-be strategies prospective homebuyers want to employ is “waiting for prices to go down.”
When Baldivis became the hottest suburb in the Perth market a couple of years ago, people were still talking about waiting for prices to go down. The Rockingham area is one of the fastest-growing markets in Perth, but some homes can still be had for reasonable prices. However, those who wait for prices to go down are going to lose money on a monthly basis.
Why it Doesn’t Work
People look at what happened during the Global Financial Crisis (GFC) and think they can wait until prices go back down. What they don’t realise is that real estate prices always rise in the long term. While the market may have occasional troughs, they are nearly impossible to predict.
Bottom line: the only way prices are going to “go back down” is if there is another worldwide financial event like the GFC. When it does happen, it is likely that you will find it even harder to buy a home than you may be finding it now.
You Are Losing Money
Whether you are looking to purchase your first home, purchase your first investment property or move to a larger home, procrastination can cost you money. The value of your home increases every year. If you are living in a $300,000 home and the market increases by 10%, you gain $35,000 in equity. If you are living in a $400,000 home, you would gain $5,000 in equity in the same market.
Bottom line: the sooner you make your move, the more money you will make when it’s finally time to sell.
Call (08) 9527 1800 to learn more.