Should I buy property now… or wait for prices to drop further?

You can’t escape the headlines that remind us property markets around Australia are in the adjustment phase of the cycle where prices are falling.

So, is this the leg-up first home buyers so desperately need, to get themselves onto the property ladder at last?

Is it the perfect time to trade up from your current home, to make space for your growing family?

Well...firstly there are multiple signs that our housing markets are looking for a floor.

Dr. Andrew WIlson reports that the national capital city quarterly median house price increased by 0.8% over March compared to the February result, with Sydney house prices up 1.3% and Melbourne house prices up 0.8% while Brisbane house prices increased just 0.2% over the month of March

Does this mean investors should act now to secure an investment property that builds a foundation under their wealth?

Or should we all just calm down, bide our time, and wait to see if the market continues to fall?

First of all – don’t try to time the market

Many a property “expert” has tried and failed when it comes to pouncing on real estate at just the right time.

Just look at all those experts who were concerned our property market would fall a couple of years ago at the beginning of the Covid pandemic, and how wrong they were.

Those homebuyers and investors who waited for "the right time" missed out on one of the best buying opportunities of their lifetime.

Then you only have to go back a few more years and see how wrong many of the predictions were when property values slumped in 2017-18 before the federal election that threatened to change property tax laws.

That homebuyers and investors who took advantage of the dip in the market are looking at very handsome profits today.

Sure, it would be great to sneak into the market just before it turns again, but it's just too hard to time.

However, there are signs the market bottom may come sooner than many think.

In my mind, once inflation peaks, and that's likely to be in the 4th quarter of 2022, and once interest rates peak, and that's likely to be in the first quarter of 2023, buyers will be back in the market as they realise the worst is over.

But you’ll only know that you missed the opportunity of a lifetime after it’s passed you by, just like the decision to jump on what looks like a bandwagon will only reveal itself to be a sheep drop off a cliff once it’s too late.

So, don’t even bother speculating on the future of the market.

Instead buy when you’re ready, and not a minute sooner or later

I’m sure you’ve heard stories about would-be property moguls who “just missed out” on buying up big, pre-boom.

It’s tempting to be drawn in by this hype, but the fact remains that the only really good time to buy a property is when you are ready.

No matter what the market is doing, how great the conditions seem, or what a bargain this particular property is, if you don’t have the solid financial and personal situation to back up your purchase, it’s likely it will all end in tears.

Ask yourself, can you really afford it?

• Have you taken into account not only your current financial circumstances, but also the likely (and unlikely, but possible) scenarios that you could be faced with down the track?
• Have you planned for things like unpaid maternity leave, or school fees?

• What about unexpected costs, like major surgery or a lengthy period off work?
• Don’t forget to factor in at least a rise or two in interest rates.

Ask yourself: Is it really the right time for you to buy?

This question is not just about money, either – your personal life should be a key driver in the decision-making process, too.

If you are buying a home to live in, then your personal needs really should dictate your timeframe.

It shouldn't really matter what the market is doing as you're making a long-term decision.

Don't let short-term influences get in the way.

If you are buying an investment property, then remember it's a long-term game.

It doesn't really matter what the market is doing,  because you're not buying "the market."

You are buying an individual property in the market, at the right price.

The type of property that  you will hold onto for the long-term, and look back on in five years' time and say "Wasn't that a great purchase - gee I bought it cheaply."

Have you got a plan?

Wealth is created by building a substantial asset base and you achieve this by holding good investments for a reasonably long time, reinvesting your income, and allowing your capital gains to build up.

Of course there's much more to a successful property investment strategy than that.

You see...attaining wealth doesn’t just happen, it’s the result of a well executed plan.

Planning is bringing the future into the present so you can do something about it now!

At Metropole my team helps investors by building them a personalised  Strategic Property Plan

When you have a Strategic Property Plan you’re more likely to achieve the financial freedom you desire because we’ll help you:

• Define your financial goals;
• See whether your goals are realistic, especially for your timeline;
• Measure your progress towards your goals – whether your property portfolio is working for you, or if you’re working for it;
• Find ways to maximise your wealth creation through property;
• Identify risks you hadn’t thought of.

And the real benefit is you’ll be able to grow your wealth through your property portfolio faster and more safely than the average investor.

Do you have a plan for your financial future?

If so does it contain the following components:

1. An asset accumulation strategy
2. A manufacturing capital growth strategy
3. A rental growth strategy
4. An asset protection and tax minimisation strategy
5. A finance strategy including long-term debt reduction and…
6. A living off your property portfolio strategy

If not please click here and find out how Metropole's Strategic Property Planning service could help you.

The bottom line:

Don't make this massive decision, which could impact your financial position for years to come, based on market conditions.

Consider your own personal budget, goals, future plans and risk profile, and then contemplate whether buying a property now makes sense.

And if you are still uncertain, an experienced independent property strategist could also be a good sounding bound to help you make the right call.

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.