Irrespective of whether this is your first time buying a home or you’re thinking of upgrading, downsizing, or relocating; purchasing a home is a mammoth decision that requires in-depth consideration. But, when you take into consideration the fact that we’re living through a global pandemic, and what many are calling unprecedented times, the decision to buy a house becomes that much weightier.
But, with a level-head and a checklist, you can determine whether this year is the year for you to buy a house.
What To Consider Before Buying A Home in 2021?
1. Your Finances
Every year is the year to consider your finances. But, this year it is more critical to closely examine your finances than in previous years. Following how COVID-19 upended many of our plans and daily activities, it’s crucial that you examine your finances before making a large purchase or long term decision. Start by determining how much stability you have in your job and what skills you have that are relevant in the open market. Then consider if you’ve made any other changes to your life or lifestyle, career, or relationships that can make you financially vulnerable.
2. Market Variety
The property market is diversifying.
You aren’t limited to units or houses. In fact, you can get a remarkable townhouse in a lovely suburb for a reasonable price. But market variety also means you have first access to up-and-coming suburbs that are yet to experience a surge in prices.
This market variety increases your chances of finding your ideal home in an idyllic area at a reasonable price.
3. New Developments
The greatest benefit to anyone buying a home this year is the amount of off-plan properties nearing completion.
These off-plan properties enable you to get reasonable prices for a property that could be sold for far more in future. By buying off-plan you’re essentially securing the price of a property a year or so into the future, so by the time move-in day arrives, your home will have already appreciated in value.
Besides, new developments also give you the flexibility to make additional strides in saving before you have to pay the entire deposit.
4. Your Cost of Living
Each year you don’t own a home, is a year you’re paying the mortgage on a property you don’t own. Although rental prices fluctuate and have been steadily decreasing because of COVID-19, when they suddenly spike, the backlash will be devastating and immediate. Instead, because the interest rates are the lowest they’ve ever been, if you secure a fixed-rate loan, you could end up paying less per week than if you were renting. In fact, on a 30-year fixed-rate loan term, with an interest rate of 2.79%, it’s estimated you’d pay $548 per week for a $600,000 home in Sydney. This is just $8 more than the cost of renting a unit. Considering that the cost of rent will increase once the economy begins opening, buying a home this year is the better option.
Leverage The Current Market For The Best Experience
Global pandemic aside, the local market is constantly evolving and becoming that much more robust. While property prices are rising, the government is also ramping up incentives to help you accomplish the dream of owning a home sooner.
Considering that the majority of the home sales in Sydney happen for homes between the 1 million to 2 million, but closely following are home prices in the 600,000 to 800,000 range, it’s fairly easy to be priced out of the market.
Because NSW – especially Sydney and areas surrounding Sydney – are yet to reach their peak, you’re still getting a “good deal”. When you couple that with the low-interest rates, you’re unlikely to fall into debt to live in one of the most desirable cities in Australia, and possibly the world.
Time is of the Essence
As the average buyer, your reason for buying a home won’t be about its investment value, you should still consider the resale value of your home. Sydney has about a decade – if not more – of consistent property price increases ahead. If you wait until next year, you’re only going to end up paying more. But, the increase can be so significant that you may have to rethink your decision to purchase. Essentially, when it comes to purchasing a home in Sydney there’s no time like the present. You have to act quickly if you want a reasonably-priced home.
If you’re not sure you need to act fast, consider that in 2019 a home that was worth $550,000 would cost $600,000 in 2020. According to modest estimates, you can expect to pay nearly $700,000 for that same home – without any renovations or modifications – if you wait another year.
The conclusion? Act swiftly.
If you don’t want to have to spend another $100,000 more than you need to on a home, don’t wait until next year. Because all waiting is going to do is put you at a disadvantage and prolong your journey to home ownership.