So your New Year’s Resolution was to buy a property by the end of the year, but how many of you have actually accomplished that goal yet?
Whether it was a resolution or not, many of us looking to buy a property this year
have still yet to do so. At iBuyNew we constantly hear the same excuses on a weekly basis from potential buyers:
- I haven’t had time to look yet
- It’s too expensive
- The property isn’t quite right for me
- I’ll wait for something better
- I haven’t got a 10% deposit
Although some of these reasons may be genuine, such as not yet having a 10% deposit, many of these property hunters are just stalling and the likelihood of buying that property this year is actually low.
Our fears also drive us to avoid buying property and hearing mixed reviews from the media or gossip from friends, which is often untrue and exaggerated can also sway our decisions to buy property.
Buying a property is of course a major decision and is likely to be one of the largest purchases you will ever make. You therefore need to take the time to know what you want, how much you can comfortably afford and where you want to buy. Although listening to friends and family is all well and good, it’s best to speak to a Property Consultant who knows exactly what is going on in the property market and they can provide you with the latest research, data and hard solid facts that prove why certain areas are the best place to buy property right now.
You should note down what your ‘must haves’ are such as a two-bedroom apartment with parking, close to schools, transport and shops. You should also note down your ‘would-like to haves’ such as two bathrooms, communal facilities or a certain aspect.
Making a list of all the things your property needs to have will help narrow down your search and make the whole property hunt less daunting, whilst anything extra from your would-like to have list is a nice little bonus.
If this is your first property, then you are not searching for your “dream home” with designer finishes. You simply should be looking for a property that ticks your must have boxes, to allow you to step onto the property ladder.
To make this process easier for you, our expert Property Consultants at iBuyNew are here to guide you every step of the way, whether you are a first home buyer looking to purchase your first home, an owner occupier looking for your next home or an investor searching for your next best investment property.
The actual process of buying property is fairly straightforward and residential housing is actually a relatively safe investment, compared to shares for instance which can be volatile.
So, if you’ve been thinking about buying that property this year, then there’s still plenty of time to buy before the end of the year. However, by not acting today, you could potentially miss out on thousands of dollars, alongside a number of crucial factors.
To really point this out to you, we have come up with 10 things you will miss out on by not buying property today.
10 things you will miss out on by not buying property today
1. Low Interest Rates Interest rates
are currently at an all-time low of 1.50 per cent, having reduced by 25 basis points in August 2016 from 1.75 per cent. This means that there’s never been a better time to take on a mortgage, with lower repayments required, making home loans far more affordable. With interest rates at a record low, having all of your money locked up in a savings account won’t do you any favours either. As Robert G. Allen says, “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
2. Time in the Market
Another great reason why you should be buying property today is that you will have time in the market
. Ideally, property should be held for the long term of at least 10 years which will see your property ride through the property cycle and typically double in value.
It's also important to keep in mind that there is also really no bad time to buy property. It’s not timing the market, but time in the market that counts.
3. Lower Property Prices Compared to Next Year
By not buying a property today, you are likely to face increasing property prices next year or two years from now
, making it more expensive to get a foothold on the property ladder. It may seem like property prices are already expensive, especially in Sydney and Melbourne, but the truth is they are more than likely going to edge higher the longer you wait. And with wages not increasing at the same pace as property, you could quickly get left behind.
Sydney is a prime example where property prices exploded in 2014-15, with the median property price almost reaching the million-dollar mark.
As well as missing out on more affordable property prices now compared to in a few years’ time, you could also miss out on some serious levels of growth
. Take Sydney again for example. Sydney saw an explosion in property prices, so if you had bought prior to this, then you could have made some serious capital gains in just a couple of years.
One example of this is one of our Sydney projects in Arncliffe. A 2-bedroom apartment in 2013 cost $560,000, and today’s current valuation for the same property is $710,000. If you had bought here, you would have made $150,000 equity
in the space of just three years!
5. Step Closer to your Next Property
Buying a property today also puts you one step closer to owning your next property
. Instead of having to save up another 10% deposit, you could simply use the equity created in your first property to fund your next one.
6. First Home Buyer Grants
If you’re a first home buyer then you can also take advantage of the First Home Owner Grants
from the government, when buying new property. Currently in Queensland, the government have increased the First Home Owner Grant by $5,000 from $15,000 to $20,000 for 12 months from 01 July 2016. As a first home buyer in Queensland, this is definitely worth getting your act together and buy your first home.
7. Stamp Duty Concessions
As well as the First Home Owner Grants, you could also take advantage of stamp duty concessions
when buying new property. This again can help you save money when buying property.
8. Tax Savings to Reduce your Next Tax Return
How much did you save in your tax return this year? Did you know that by investing in property then there are a number of tax savings
you can claim, helping to reduce your taxable income? Let’s face it, nobody really wants to give the tax man all their hard earned money, so buying a property today before the end of the tax year, could help you reduce your taxable income significantly, particularly if you are a high income earner.
Some of the expenses you can claim include depreciation, negative gearing, legal fees, property management costs, borrowing costs, council rates, water charges, cleaning, pest control, repairs and maintenance and more.
9. Lower Competition
The longer you wait to buy a property, the more competition you are likely to face
. The population of Australia is constantly growing with some capital cities such as Brisbane set to double within the next 15 years and we all need somewhere to live. This means that you need to know what property you want, where you want to buy and what your budget is so that you can get in first ahead of the competition.
Buying property off the plan can help, but again you need to act quickly to avoid missing out, particularly in hot growth suburbs. This is where iBuyNew can help as we will let you know before anyone else the next best growth suburbs.
10. Property Security
One of the reasons why so many people look at buying property is for property security and a wealth generation tool
. We want to secure our futures and have a comfortable retirement and buying properties is one way of securing our financial future. The earlier you buy property, the longer you have for this to grow in value, whilst accumulate more properties at the same time and build up a strong property portfolio. One property is unlikely to allow you to retire comfortably. Depending on the value and what other assets you may own, as well as the type of retirement you want, it is more likely that five properties or more will be required.
One of the greatest things that gets in the way for many of us is our fears – the fear of something going wrong, buying in the wrong location or being unable to afford your mortgage repayments. However, by clearly understanding your goals and devising a strong plan, you can avoid all of this.
In order to get anywhere in life, we must be prepared to take risks and the same applies for property. And as Denis Waitley clearly states, “Life is inherently risky. There is only one big risk you should avoid at all costs, and that is the risk of doing nothing.”
If you are happy to miss out on capital gains, property security, tax savings and time in the market then continue to do nothing and watch the market grow around you.
However, if you are prepared to act today and take some risk to secure your financial future then get in touch with iBuyNew and book a meeting with one of our expert Property Consultants. We can work out a property buying plan with you, tailored to meet your goals and help you find the property that is right for you.
Give us a call on 1300 123 463
and get one step closer to buying that property today.
Published on 23rd of September 2016 by Marty Stanowich