Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Invest

Is it time to buy property?

By Cameron Micallef · November 06 2019
Reading:
egg

Invest

Is it time to buy property?

By Cameron Micallef
November 06 2019
Reading:
egg
Couple near the sold sign of property

Is it time to buy property?

author image
By Cameron Micallef · November 06 2019
Reading:
egg
Couple near the sold sign of property

While an increasing number of Australians think now is a good time to buy property, economists appear to be less convinced.

Finder has revealed that only 17 per cent of economists think property is currently affordable in Australia, falling from April’s high of 59 per cent. 

According to KVB Kunlun chairman Peter Boehm, the rate cuts are doing more harm than good for the housing market.

“House prices have been increasing (making it harder for first-time buyers to get into the market), existing mortgage holders are maintaining repayments at current levels to help reduce their debt quicker, and therefore not spending this ‘freed up’ cash,” he said.

Insights manager at Finder Graham Cooke believes economist have not been persuaded by rate cuts when it comes to affordability.

Advertisement
Advertisement

“Housing affordability cuts both ways,” he indicated.

“When it is high or economists feel positive, property prices can be relatively low, meaning more Aussies have a chance to buy. The flipside of course is home values might be trending in the wrong direction, and no one wants to catch a falling knife,” Mr Cooke said.

Despite economists believing it’s a bad time to buy, consumer sentiment would indicate the reverse. 

In October, 59 per cent of consumers said it was a good time to buy property, up from 54 per cent in May.

Mr Cooke said consumers are likely responding to the positive news they are seeing about house prices in Australia.

“Buying property is still considered ‘safe as houses’ in Australia, but it’s taken with a grain of salt in many countries since the global financial crisis.”

“House prices don’t always rise, and the economy doesn’t always perform well,” Mr Cooke warned.

So is it a good time to buy or not?

While nobody knows if the property market has turned a corner, or if the current price boost is simply a dead cat bounce, Mr Cooke believes it’s more likely price growth will continue to be seen.

He also commented that buyers looking to get into the market may never have a better time, with historically low interest rates making credit cheap.

“First-time buyers with a deposit saved may miss the good-value window if they don’t get into the market soon.”

“If we keep seeing prices increase as dramatically as they’re doing now, the market will have fully recovered within a year,” Mr Cooke said.

He also advised that anyone looking to save for a deposit for a home is better off moving to a smaller bank that offers a better rate on their savings.

“You’ll find better ongoing rates with smaller banks such as UBank and ING and neobanks such as 86 400 and Up than you will with the bigger banks,” he offered.

According to Mr Cooke, “a little bit of homework can go a long way to boosting your deposit”.

Is it time to buy property?
Couple near the sold sign of property
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

Join the nestegg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.