This oversupply can serve to push down property prices, as properties sit on the market for a longer period of time and sellers competitively price their homes in an effort to attract buyers to their properties.
It could be said that there are currently several buyer’s markets across the nation as property prices have continued to fall. In Australia’s largest capitals, for example, Sydney and Melbourne, property prices have experienced annual falls of 5.6% and 1.7% respectively and Perth and Darwin have both experienced annual falls of 2.1% and 4.0% respectively. Furthermore, according to CoreLogic, advertised stock levels are over 7% higher than they were at this time last year which suggests that there are fewer buyers in the market and homes are taking longer to sell.
These factors combined could make now a great time to get in the market but there are a number of factors you will need to consider such as:
Are you ready to buy?
Ensure you are in a healthy financial position in order to buy a home. Don’t rush if you’re not ready. Ask yourself, do you have enough of a deposit saved to buy the home you desire? Can you service loan repayments over the long-term? You should aim to have a minimum of 20% saved and don’t forget the additional costs associated with a property purchase beyond the deposit such as stamp duty, solicitor’s fees, pest and building inspections and more. You may still be able to secure a home loan with a smaller deposit providing you pay Lenders’ Mortgage Insurance or are supported by a guarantor.
Do your research
Find out how much you are willing spend. Attend a few open homes to find out what type of property you want to purchase and the price range it is in. Next, you will need to get a sense of your borrowing power to find out if you can afford the home you want. Schedule an appointment with your local Mortgage Choice broker to find out how much you may be able to borrow.
Get your financing pre-approved
Getting your home loan pre approved is a great way to let vendors know you are serious about buying. Pre-approval is a no cost, no obligation indication from a lender of how much it considers you are eligible to borrow (It gives you an indication of what you can afford to borrow). While it does not guarantee you will have your loan approved, it is usually a good indication that you might and will also give you insight into the home loan application process.
Don’t wait forever
If you have been diligently saving for your home deposit and believe you might be in a good financial position to buy, don’t hold yourself back. Speak to a qualified mortgage professional who can assess your situation and help you determine if now is a good time to make moves towards realising your property ownership dreams.
If you are looking to take advantage of current housing market conditions and buy your first home or investment property, speak to your local Mortgage Choice broker today. We can help you determine your borrowing power, and when you’re ready, find a loan that is best suited to your unique financial needs and goals.