Tags :A Current Affairfinanceinterest ratesPROPERTYReal estate
For many years, real estate has been ruled by the rule that renting is better than buying.
This may not be true however.
At the moment, the hammer drops at home auctions for higher prices than anyone could imagine and more frequently than anyone could believe at the beginning.
Corelogic’s Tim Lawless stated that “We have seen the housing market change quite fundamentally over the last three months.”
These record low interest rates are important. You can get a mortgage starting at the number 2.
Some people see a return to good times and rising prices. Others see a market that is prime for fraud.
Martin North, Digital Finance Analytics stated that “The risk of prices dropping over the next couple decades if we purchase now.”
It finally opened the doors to first home buyers like Joel Avramis, Lisa’s partner, to enter into the housing market.
A Current Affair asked her why she first went to an Auction when it began looking.
“I returned home, and I tossed all of the paperwork. I was like, “Okay, we’re never going to buy a house.”
Things are improving as Ms. Avramis plans to move into her new home before Christmas.
Low interest rates can be a double-edged sword. Lenders and banks are making it harder to borrow.
Ms. Avramis said that she doesn’t have any debt or credit cards.
Once finances are in order you can begin bargain-hunting. You need to know where they are.
According to Mr Lawless it was obvious that the market reached its peak between June and May, depending on where one is looking.
It is possible to buy cheaply but it all depends upon where and how you look.
Property is not just one market. There are many. This is where caution is needed.
“In Western Australia… property prices are down more than 20 per cent on average, but in some post codes over in the west they’re down 30 per cent,” Mr North said.
This is a harsh truth: financing is difficult to obtain and home prices remain low in many areas.
Many people can’t afford to move or refinance their mortgage at lower rates.
They can apply for a loan and the lender will assess their ability to pay it back. They will also check if there is equity or value remaining in their home.
North stated that the market was bought by people around two-three years ago. Many of those people are now in negative capital because prices have fallen significantly.
Buyers and banks had to temper the excitement over apartment block building in Sydney and Melbourne, where there is an increase in prices.
“Units are suffering from severe pressure, particularly those that were built within the past 10 to fifteen years. Poor quality construction is the reason, Mr North stated.
This has led to fewer properties going on the market.
Lawless stated, “Buyers have limited stock to allow buyers to compete with each other.”
“Bad news buyers, but quite good news sellers”
Owners who are unable to sell or don’t want to sell have one option.
The old way of making a property go up in price is back in vogue – renovation.
For many first-time buyers, the possibility to renovate a renovator’s dream is now more possible than ever.