Is Now The Right Time To Buy Property?

By Sandy Naidu | January 26, 2009

In the beginning of 2008 68.9% of the respondents for the Mortgage and Finance Association of Australia/Bankwest Home Finance Index believed that property prices would rise in the coming quarter. In 2009, this figure fell sharply 14.6%. There is a lot of uncertainty in the market at the moment. Lot of economic pundits and global leaders have warned that 2009 will be a tough year. People are unsure about their job security and hence even if they have the deposit all saved up, they might delay entering the market.

I personally have never liked ‘timing the market’ concept. There are times when the market is way over heated and then you have to leave that investment alone and go and look for something else to put your money in. But the current property market is definitely not over heated. As long as you pay the right price for the property it is never a wrong time to buy.

So how do you know you are paying the right price -

1. Do your research. Don’t make a hasty decision. RealEstate.com.au and RPData are two of my favourite online tools. The former it is free, with the later you have to pay for property evaluation.

2. Never pay the asking price. Don’t be afraid to bargain. Start between 5 to 10% of the asking price.

3. Do all the necessary property inspections and make sure there are no hidden repairs.

4. Never, ever borrow more than you can afford. In fact in the current climate borrow an amount such that in case of a job loss, you can afford the repayments for at least two to three months.

2009 could be the year of bargains. If you could afford it, then don’t let the economic warnings scare you.