When is the right time to buy OMB Solicitors

WHEN IS THE RIGHT TIME TO BUY?

With the Australian property market going through a turbulent time, during the Covid-19 pandemic and its recovery, the question of when to buy has never been more difficult to answer.

My golden rule is that generally you will never pick the top of the market and you will never pick the bottom of the market. Different considerations come into play when discussing the purchase of a “home” compared to an “investment”.

With a home, you must factor in the use and enjoyment of the property as well as the financial investment that it entails. When it comes to decisions of the heart, it can never really be all about the money. When you are purchasing a home, you want to buy somewhere you are happy to live and your family can be safe and enjoy their time. If you are moving to a new city, this might take a period of time and often a period of renting in an area to figure out where you are most comfortable and where the most appropriate suburb for you to live is. Factors including proximity to schools, shopping centres, beaches, work and other interests will also influence your decision. When buying a home my feelings are that as long as you are not overpaying for your home and if it is a medium to long term hold you are generally within the right bracket.

A common question then is how do you work out the value? My top tip here is to do your research. As difficult as it may be, you should attend as many open homes, view as many listings and research as much recent sales data as you possibly can. The term “value is in the eye of the beholder” is never more important, as the value of a certain property will differ to each party. Once you have a genuine understanding of relative prices, you will be in the best possible position to determine how much it is appropriate to pay for any property.

When buying a property as an investment, the perspective is slightly different. The emotion should come out of your purchase and it all becomes about numbers on a page. You need to determine what your needs are, what your financial capacity is, and what is the purpose and term of the investment. Are you hoping to negatively gear (make an income loss) on your property or positively gear it? Then you need to determine the best structure to own the property in. It may be individual names or it could be a trust or company or a combination, depending on your tax and legal advice. There are many factors weighted into your decision to purchase a property for investment.

As to our lead in question as to the right time to buy, well this largely depends on you. The market will go up and down with extrinsic factors like interest rates, supply and demand and economic factors beyond your control.

SIMON BENNETT

PARTNER, ACCREDITED SPECIALIST (PROPERTY LAW)

• Commercial & Residential

Conveyancing • Structuring Advice • General Contract Law including shareholding, partnership and joint venture agreements • Commercial & Retail

Leasing

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