When is the best time to buy off the plan?
If you’re waiting for the ‘right time’ to buy a property, then you need to seriously think again. When it comes to buying a property off the plan, or any property for that matter, it’s time in the market that really counts, not timing the market.
Property is a long term investment
Granted, the ideal time to buy a property is at the bottom of a property cycle where prices are low and there is little competition to go up against. As a property is a long term investment, you should be looking to hold on to a property for a minimum of 7-10 years. This allows you to go through a full growth cycle and generally see your property double in value.
Consider the property cycle
However, if the city you are looking to buy in is currently at the peak of the cycle, then you can do one of two things. You can either buy here, but understand that you are buying at the most expensive time and you will see flat growth after this peak for a number of years, or if you are an investor you can look at investing in property in another city which is undergoing growth and yet to reach the peak of its cycle. This allows you to tap into more affordable prices and benefit from the higher growth that the city is expecting to go through.
Even if you do buy at the peak of the cycle and undergo flat growth of say 2-3%, you will still be financially better off buying a property, than not buying one. For Sydney, the average property at today’s prices with 2-3% growth will still see approximately $20,000 growth per annum, so if you are looking to enter the market, then an increase of $20,000 in property prices can mean the difference of being able to afford a property or not. This is especially true as wages growth is not keeping pace with property price growth, widening the affordability gap even more.
Buy property when you can afford to
By not buying a property when you can afford to do so, it is likely that by the time you do decide that you should purchase a property, prices would have dramatically gone up, or you might have spent your deposit on something else and you simply no longer have the means to buy.
Don’t play the waiting game
The same also applies to when you play the waiting game. Simply waiting for the “perfect property” to turn up is a disaster. There is no such thing as a “perfect property”. The only thing that you are doing is making an excuse not to buy now and years might go by until you realise you should’ve taken some level of risk and bought a property just to get onto the property ladder.
Advantages of purchasing off the plan
When buying property off the plan, you are at a great advantage compared to buying an established property due to the entry prices being far less. This is particularly true the earlier you buy a property, so it makes sense to sign up to a property company’s mailing list like iBuyNew to ensure you receive all the latest information on new property launches before they go on sale to the general public.
This allows you to get your hands on a property first before anyone else, allowing you to choose the best floor plans, as well as secure the best prices. As more apartments within a development sells, the more the property price will increase in value as time goes by, particularly after a developer reaches their pre-sales target. So, by waiting until the property has completed, you can expect to pay a lot more compared to when the development has yet to commence.
So the best time to buy off the plan property is when you can afford to. As long as you buy a property in a good location, close to amenities in an area with low vacancy rates and good rental yields then you will do well.
Take action today
Simply waiting for the right property to come along will leave you waiting for a long, long time. It is important that you are decisive and take action today to see the greatest benefits that property can provide, and the younger you start, the greatest amount of growth you will receive.
Buying property in your early 20s will mean you have more time for your property to grow in value, enabling you to expand your property portfolio and buy even more properties if you wish. In turn, this can see you retiring earlier, allowing you to live off your properties as passive income.
So, when is the best time to buy off the plan? Keep in mind the following:
Start in your early 20s;
Ideally buy at the bottom of the property cycle;
Buy as early as possible within a new off the plan development;
Buy as soon as you can afford to.
To find out more about getting started in property investment and how you can secure the best property today, why not give the iBuyNew team a call on 1300 123 463.
Just remember, “time waits for no one”, so if you don’t do something today, when will you?