“With property prices rising, should I wait a few years to buy a home and hope prices fall. In the meantime, how can I grow my current house deposit through other investments?”
-Question from Jacob in Southport, QLD
Top answer provided by:
Firstly, I don’t have a crystal ball. And neither does anyone else. In lieu of that, the best thing we can do is use historical data – and that tells us that over the long term, property prices rise.
When it comes to property, it’s all about time in the market, not timing the market.
From my perspective, when you are looking at buying a property, you need to take ask yourself a few questions:
- Is it going to be a long term (10 + year) investment? (The transaction costs (stamp duty & agents fees) are the silent killer when it comes to property)
- Can your budget hold up if interest rates rise close to their long-term average? (Right now, they are at all-time lows)
- Do you have solid foundations in place in case the proverbial hits the fan? (Like the right insurance & a cash buffer)
If the answer is no to any of those, I don’t believe it’s the right time for you to buy.
There are different avenues to grow your deposit if purchasing right now isn’t the right call – including saving at the bank, using the government first home buyer schemes, or even investing outside of property.
Before committing to anything, I firmly believe you have to understand the options in greater details.
Finally, if you go down the route of purchasing a property – using a mortgage broker is something I would recommend.
Here is a short piece one of my colleagues put together, which might help you understand that process better.
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