A property purchase must be viewed through a long-term lens
- Written by Tim McKibbin
The compounding impact of interest rate rises is fuelling some interesting behaviour among buyers and sellers.
For buyers, the price easing cycle has been playing out for a few months and some people are playing the game of trying to guess the bottom of the cycle. This will only be apparent in hindsight.
People who hold off on the purchase of a property they’ve identified as ideal in the hope of paying less down the track will typically end up missing out and settling for less, in a property not as well suited to their needs. Supply is low and options are slim. If you find your perfect property then now is the perfect time to buy.
For vendors, many are taking a wait-and-see position as buyer caution prevails amid the broader economic uncertainty.
Both perspectives are understandable but both are inherently risky. Housing is a non discretionary, essential commodity and trying to predict where we’re at in the cycle is fraught with danger.
In a subdued market like this, it is important to remember that a property purchase must be viewed through a long-term lens.
A long-term view is essential when assessing the potential for value growth as well as the typical mortgage duration.
Buyers and vendors should be cautious in the current climate, because interest rates are a good chance of rising further and the economy itself is delicately balanced.
But equally, for those who need to buy, holding off in the hope that prices will continue to fall may prove foolhardy. There are good opportunities available now.
