Property buyers are being urged to take the plunge early in 2010 to avoid missing out on purchasing their dream property at a price they can afford, according to an article from Yahoo Finance published on 06/01/2010.
Meighan Hetherington, Managing Director of Property Pursuit in Brisbane said, “Buyers need to realise that the peaks and troughs of the property market are shortening; so we are now seeing the start of a property market surge, reminiscent of 2007.”
“When looking to purchase a property, you should really look at the property lifecycle to determine the best time to invest. If you wait until the end of 2010, you could face exorbitant costs and limited supply,” Ms Hetherington said.
“We’ve already seen high prices and fast-moving sales in the second half of 2009, so the next down-turn in the market may not occur for another two years.”
Frankly speaking, I agree with him and am looking to buy a house. I just don’t wait until it’s too late!
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I wouldn’t buy now. Housing market way too high, interest rates rising and still an unsteady world economy. It is like 1989 all over again and the housing market will only come crashing down like it did before. There is not a housing shortage. I am going to wait 2-3 years because I know there will be bargains to be had.
I wasn’t in Australia in 1989. Could you please share more with us? Did you buy any property after that?
Cheers.
Yes Patrick. In 1989, it was 17%- 18% interest rates and the peak of house prices back then. Being young and naive, I stupidly bought a house with a family member and then the recession hit and housing crash occurred. I waited 8 years to make a profit, or at least get my money back and sold it at a $10k loss. That doesn’t sound like alot today, but it was huge back then when I was on crap wages. Also, like today, everyone was panicking that they were going to miss the boat and got sucked into all the Real Estate spruikers. However, I did scrimp and save and bought another place, but would have been well ahead (with a better property) had I not bought the first one. I’m not complaining , because I did better than others who lost their houses because they couldn’t repay their loans (job losses etc.) Today you have the opposite scenario. Very low interest rates and high house prices. With rising interest rates, overinflated house prices etc. I can see the same thing happening. But this time the debt people will incur will be far greater. Before the financial crisis, interest rates were heading to 10%. Now that Aust is out of financial crisis, there is nothing stopping the rates from getting back up near there, but people have taken on more debt because house prices have jumped ridculously over the last 2 years. It is like a sea-saw, and it will fall the other way. Of course this is only my opinion, but once bitter, twice shy. Also we are the only western country in the world whose housing has not gone down. Just a gut feeling, but I think it will happen. Many people my age are feeling the same thing. Time will tell I guess. I tell people, if you are going to buy, but to live in and not to invest. If it goes down, then you can ride it out because it is you prime home. I hope this makes sense to you. Cheers
Many thanks, Nick! I hope we can both learn from others’ experience. I do agree that the rates will go back to the 9%-10% level, I just don’t think this will affect the property price dramatically. However, if the government approves new building projects at 10 times of the current level, the property price will drop a lot.
Hi again Patrick,
Interesting you think the int rates could hit 9-10% too and that nothing will be affected. Before the recession, many mortgage holders were struggling with repayments and that was at around 6-7.5%. If it does go to 9-10%, I can see many mortgage defaults. I may sound all doom and gloom, but I think the writing is one the wall. However, your point re building more houses if very true.
So should we investigate buying overseas…like America…..until the Aus market recovers? I have been investigating a company that is advertising USA property…Am seriously considering it!