When is the best time to buy a property?

Should I buy a property

From personal and financial considerations to the performance of the real estate market, there’s a lot that needs to be taken into account before you decide to buy a property.

Buying a property is a huge decision, not only from a financial perspective but also from an emotional one. Before you buy a property you need to be sure that you have found the right home, that you’re ready to make the sacrifices necessary to make home loan repayments, and that the home loan you choose will be affordable now and in the future.

Take our quiz to see if you're ready to purchase property:

Let’s take a look at the issues you need to consider to work out whether now is the right time to buy a property.

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Personal factors

Are you ready to commit to a property?
Depending on your strategy, owning a home usually means living in it for an extended period of time, so you’ll need to be willing to stay in the one place for a few years or more. You also need to be sure that the property and location suit your current and future lifestyle needs. For example, if you’re thinking of having kids in the next 5 years, you may want to ensure that you buy in a safe neighbourhood with a low unemployment rate.
Are you ready to commit to a home loan?
Paying off a home loan requires an level of financial discipline for many years, so are you willing to make the sacrifices necessary to pay off the loan? This could mean cutting down on expenses — no more expensive overseas holidays for a while —and setting a weekly budget that you can stick to.
Is the property right for you?
If you’re going to commit to a home for several years, you’ll want to make sure the property has all the features you need. Does it have enough bedrooms and bathrooms for your growing family? Will you be able to keep up the level of work required to maintain the backyard? Before making an offer, take the time to work out whether you and the property are a good match.
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Personal circumstances

Financial factors

Do you have a budget?
Before you start looking at properties, work out a weekly budget and see how much money is left over after all your weekly expenses. This will give you an idea of the price you can afford to pay for a property — if your perfect home is out of reach, it might not yet be the perfect time to buy.
Can you afford to make repayments?
Before taking out a mortgage, you need to be sure that you will be able to make your repayments in full and on time. So consider how much repayments will be on your desired loan amount, as well as whether or not you will be able to make additional repayments from time to time. With this in mind, you’ll need to consider what level interest rates are at to work out how affordable loan repayments will be.
Do you need to cut back on expenses?
In order to afford your mortgage repayments, it may be necessary to cut back on some of your regular expenses. So would you be willing to cancel your gym membership, eat at home rather than dining out so often, and wave goodbye to those expensive overseas holidays or interstate weekends away?
How large is your deposit?
The amount of deposit you have saved can influence the property you buy and the amount of money you can borrow. As a general rule, most lenders will require a deposit of at least 10% of the purchase price, although certain loans will be available to lower deposits or only if you have at least 20% saved. A large deposit demonstrates proof of your financial discipline to a lender and will also help boost your borrowing power. Remember that most lenders require you to pay lender’s mortgage insurance (LMI) if you have a deposit of less than 20% for a full documentation loan.
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Market factors

Is it the right season?
The real estate market is usually flooded with properties during spring and summer. While this means there’s increased choice available to you, it also means you’ll be competing with a larger number of other potential buyers. There may be less properties for sale during autumn and winter, but there are generally fewer other buyers around during these seasons.
How is the market performing?
While there are exceptions, housing markets usually experience a period of growth followed by a downturn or stagnation of prices. Working out where the property market is at the moment (and predicting where it will head in the future) is by no means an easy task, but gaining an overall idea of how the market is performing will put you in good stead. Look at historical growth trends of the location to help you understand the market.
Are median prices rising or falling?
Once you’ve got a feel for the overall performance of the property market, narrow your research down to the suburb where you want to buy. Which way are prices trending in the suburb as a whole, and in particular neighbourhoods or streets you’ve got your eye on? Check sales results and auction clearance rates to help you decide whether or not the time is right to buy.

Once you’ve asked yourself all of the above questions, you should be a whole lot closer to working out whether it’s the right time to buy your dream home — or whether you’d be better off waiting and reassessing things in another six months.

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Property buying tips

Market factors

  • Do your research. Never make an offer on a property before doing your due diligence first. What is the real estate market like in the area? Is the sale price fair? Is the property close to all the amenities you need, such as public transport? Doing your research before you start house hunting will help you make an informed choice.
  • Be realistic. That ritzy waterfront property might seem perfect for your family, but can you really afford to make the loan repayments required? By the same token, if you’re thinking of starting a family in the next few years, is buying a cramped inner-city apartment really a good idea? Be realistic about your home buying needs and expectations to avoid making the wrong decision.
  • Monitor interest rates. Even a 0.25% p.a. interest rate rise could end up costing you thousands of dollars over the life of your loan, so look for a loan with a competitive rate. Compare interest rates among home loans and also monitor economist forecasts as to future fluctuations in the Reserve Bank’s official cash rate.
  • Ask for expert help. Whether it’s a mortgage broker helping you choose a home loan or a buyer’s agent helping you find your dream home, don’t hesitate to ask an expert for guidance when buying a property. Buying a home and choosing a home loan can be difficult and complicated, so a little help from someone who knows what they’re doing can go a long way.
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Compare your mortgage options now

Rates last updated May 23rd, 2018
$
Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.69%
3.69%
$0
$0 p.a.
80%
Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply). Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
3.64%
3.67%
$0
$0 p.a.
80%
A mortgage with a competitive variable rate, limited fees and plenty of flexibility.
3.69%
3.69%
$0
$0 p.a.
70%
Pay no application or ongoing fees and get a flexible loan with the ability to split up to 6 times.
3.64%
4.03%
$0
$395 p.a.
80%
New borrowers or refinancers from another lender get a discounted rate with this package loan.
3.54%
3.58%
$0
$0 p.a.
80%
Eligible borrowers can get $900 cashback on this loan with a 100% offset account and a redraw facility.
3.64%
3.84%
$0
$0 p.a.
70%
Enjoy all the benefits of the Basic Home Loan and take advantage of an offset account.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
Get a 100% offset account to save on interest charges, and pay no application fee.
3.69%
3.71%
$0
$0 p.a.
80%
A low rate variable home loan offer with no monthly fees or application fee charge.
3.96%
3.98%
$350
$0 p.a.
90%
For a limited time, pay no application or settlement fees. You can also take advantage of a free redraw facility.
3.70%
4.13%
$0
$395 p.a.
90%
Package your loan with an eligible credit card for discounts on rates and fees, and get a 100% offset account.

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Credit services for Aussie Select, Aussie IQ and Aussie Optimizer products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 ("Aussie"), and its appointed credit representatives. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133 Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Optimizer products is provided by Perpetual Limited ABN 86 000 431 827 (Lender). Credit for Aussie IQ is provided by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502. Home loans issued by the Lender are serviced by Macquarie Securitisation Limited ABN 16 003 297 336, Australian Credit Licence 237863 (MSL).

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Belinda Punshon

Belinda is a journalist here at finder.com.au. Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

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Important Information*
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special

Start your home buying journey with 2 years of fixed repayments and a reasonable rate from a big 4 bank. Available with a 10% deposit.

UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupied Variable P&I Rate — borrowing $700,000 or more

Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤90% ($150K+ Owner Occupier)

Loans over $150k get a discount off an already low fixed rate. Available for NSW, Qld and ACT residents only.

Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier, P&I)

New borrowers or refinancers from another lender get a discounted rate with this package loan.

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