Should I Buy Property in Sydney Now?
What bubble? New research from BIS Shrapnel reveals that mortgage repayments are easier today than they were 26 years ago. Although Sydney’s median house price is more than 7 times higher, standard mortgage repayments require just over a third of household income compared to almost half in 1989. This is largely due to the record low interest rates.
These findings provide fresh insight into the current concerns about housing affordability and prove that whilst housing may be expensive, it is more affordable today than it has been in the past.
Whilst Sydney’s rising house prices may be concerning to first home buyers, we have to recognise that Sydney is now an international city. Like New York and London, certain parts of the city will always be unaffordable to all but overseas billionaires and the international jet set.
So my advice to anyone considering buying a property right now is:
- Ignore the constant media hype about whether or not there is a bubble as this is merely speculative.
- If you are in a position to buy and have finance available, I would buy sooner rather than later. Right now, the risk of missing out and not getting on to the property ladder is greater than the risk of prices dropping. However, do not overstretch yourself financially and be aware that the current growth rate is unsustainable.
- Bear in mind that even in a worst case scenario, if prices were to drop (which seems unlikely) they will drop across the board. If you sell and buy in the same market, you will be no worse off. In fact, if you sell and buy to upgrade in a deflated market, you are likely to be better off as the price reduction on the more expensive property will be greater in dollar terms.
- Be discerning about the property you are buying as good properties will always sell.
If you would like to discuss purchasing a new home or investment property, please do not hesitate to call me on 0405 134 645.