Buying Property in a Difficult Market
With the world economic crisis still lingering scaring most people from spending money on anything, many feel it is the right time to enter the property market and buy their first home, or add to their property portfolio. There are several things to consider before taking the leap.
Firstly Australia is technically in recession and business is still slowing. People are being put out of jobs and companies are posting big losses, or marginal profits. When deciding whether to buy a property or not, you have to consider how secure your current employment is. What field of work are you in? If you are a car salesman or financial advisor your job may not be safe in the long run. You have to consider not only the next year but the next 5 years when making a big purchase like a property.
Can you meet the repayments if interest rates go up? This is the trap many people found themselves in in the United States which caused the property market to collapse very rapidly. You must plan ahead and identify how much the interest rates can rise before you fall behind on your repayments.
If you asked 100 people whether they think it’s a good time to buy, 50 would say yes and 50 would say no. The ones that say no will argue the economic has yet to find a bottom and house prices will drop even further. More jobs will go and there will be no stability near term. Basically doomsdayers.
The ones that say yes will say the market has already found a bottom, interest rates are low, the first home buyers grant has been doubled and houses are cheap. It’s a very affordable time to buy a house.
In the end it depends on your risk appetite and your financial situation.
Tags: house, mortgage, property market
Posted in General
No Comments