Is Now A Good Time To Get Into The Real Estate Market?

When it comes to the world of buying property, everyone says timing is everything or choosing the right time to enter the market can make you or break you.

Whenever you decide to buy your first home or investment property, time is on your side. Over the long term, history suggests the compounding returns of a well-chosen property will add up, whatever the market happens to be doing when you first buy. My advice would be getting into the market rather than watching it from the sidelines.  One of my favourite quotes:

"In baseball and in business, there are three types of people. Those who make it happen, those who watch it happen, and those who wonder what happened." -- Tommy Lasorda

What about buying today?

Cheap money or low interest rates create a great opportunity. Low interest rates lead to low monthly payments, this increases your chance of getting a mortgage as your serviceability increases. Years from now, we'll look back and say, "Remember back in 2016 when you could get a mortgage under 5%? Those were the days!"

Don't listen to the media 

The media pays meticulous attention to the real estate market. Auction results go up? The market is booming! Auction results go down? The market is crashing! Back and forth over and over. Remember, the media platform is accountable to advertisers that spend money with them, selling clicks rather than wise investment advice.

Real Estate Prices Are Cheap!

Yes, real estate prices have climbed significantly over the last three years. However, for those willing to hustle to find great deals or use a buyers agent, great deals can be found. I remember my Dad telling me how expensive real estate was in the 1980’s, Melbourne’s median house price was around $89K, and today it’s around $750K! Ten years from now you will likely look back at 2016 and say, "Why didn't I start back then?"

By Mark Ribarsky. Wise Real Estate Advice

We welcome your questions and feedback. If you would like to ask a question or leave a comment, please email info@wiserealestateadvice.com.au

Why Is It A Sellers Market?

Looking at the Inner Melbourne real estate market. An extreme shortage of available listings has made this the fastest-moving market of recent years. There is strong competition in the luxury market combined with scarcity. As real estate becomes more scarce in prime areas of our city, it become more and more desirable, and expensive.

Demand is high at all price points in and around a 10km radius of Melbourne. Inventory is low and we are seeing more bidding wars and higher prices per square meter than ever before. Auction clearance rates are over 90% in some inner Melbourne suburbs, that’s 9 out of 10 property’s selling at auction.

Another reason why bidding wars are erupting is due to the rising trend of Chinese investment. The impact of Chinese investment in Australia residential property has become increasingly recognised. You might be thinking why Victoria? Investors are spotting value in Melbourne real estate in comparison to big brother city Sydney. The median house price in Sydney tipped over $1M last year where Melbourne is hovering around $750K.

Population growth is another contributing factor of rising real estate investment. Over the past 12 months, Melbourne has recorded the fastest rate of population growth at 2.1%. Elsewhere, the annual rates of population growth have been recorded at 1.7% in Sydney, 1.6% in Brisbane, 0.9% in Adelaide, 1.6% in Perth, 0.8% in Hobart, 1.9% in Darwin and 1.4% in Canberra.

Mark Ribarsky is the Director of Wise Real EstateAdvice, a buyers agency that services inner Melbourne suggests ‘the real estate market is experiencing a stage in an up and down cycle.’ Property cycles usually run in "seven year cycles" hence is often referred to by property market commentators and refers to the swing in house prices through the phases of boom, bust, bottoming and recovery. Overall, price gains are likely to be constrained and over the long term, given that house price-to-income ratios and debt levels are very high and given we have just seen a period of very strong gains.