To buy or not to buy

Hey everyone,

Pre approval has been done and house prices have gone crazy.

We will be buying im a suburb we dont want (mickleham 300m2) instead of a suburb we want (lalor 500m2).

I believe houses are overpriced in Melbourne but do we buy in mickleham a new estate on a small block or take the risk and see if this price rise is the peak before a crash??

First home buyer, extremely nervous and need some guidance

Thank you

 

Why didnt you buy when it was ‘cheap’?

if it falls next year, would you buy, or wait until it bottoms?

If you dont buy, how much can you afford to be wrong?

 

Have you considered RentVesting ?

 

Couldnt get the finance. Self employed.

A house we looked at was sold for 580 last year, 3 weeks ago similar size land and house few houses down worse condition sold for 670 at auction. I cant understand it. Is it really worth buying in a new estate for the sake of buying driven by FOMO or do yoi take a gamble and wait it out

 

If you decide property is overpriced and currently driven by FOMO, sit it out.

If you think property was cheaper a while ago and you are waiting for a crash, you will probably end up regretful.

Nobody knows what the future holds so try and management your downside disappointment if the upside goal seems bewildering.

 

Would you have bought in 2018 or 2020 if you could get the finance? How about 2017?

Wouldnt buy in a new estate, but not because of fomo.

just as long as you understand that not buying is also a gamble and you can lose from that.

 

Im driven to buy because of FOMO. Im not sure what ia driving the market today.

It just doesnt seem right to me.

Im paying 30% more for supplies.

I also buy and sell cars and people are buying car 70% more what they were worth a year ago.

Houses in my area increased 10%-15%

To me it seems out of whack. I cant understand it.

If i sit it out i think ill pay 100k more as worse case scenario, but best case scenario ill pay late 2019 prices.

 

Do you need a house for your family? Is so, just get it done . In 20 years time you'll forget what you paid for the place.

 

Yes not buying is a massive gamble, i can only take advice from people who have studied the market.

Incan always buy in a new estate and build myself, 5 minute drive from main center so thats my worse case scenario of i take the game and wait it out.
But if gamble pays off i can buy in the suburb i want my family to live in.

 

Yes for my family, but new estates are bare. No doctors, no public transport, 1 supermarket which is jam packed.

 

the experts wont compensate you if they are wrong.

and when would this sort of gamble have worked?

good luck tho.

 

If you are buying a PPOR my view is that you should bite the bullet and buy what you can afford. The general consensus on this forum seems to be that we are still in the early days of the boom; so probably not a bad idea to proceed even if you may not necessarily acquire what you would have preferred 12 months ago.

Given that it is a PPOR any price adjustment of the property market in the near future is not really relevant - in a few years’ time the property would recover from the adjustment if any.

 

To frame it another way - nobody knows what the future holds. Forget the potential (and probable) upside for a moment and think what would happen if prices pulled back 20% long term after your brought.

If you brought because of sound reasoning or genuine need, despite going into it all recognising you were paying too much, then thats unfortunate but acceptable.

On the other hand if your sole reason for buying was FOMO, then you will be nursing that downside hit and living with what I would describe as idiotic reasoning for having purchased in the first place.

Not buying is not going to cost you anything out of pocket if it goes wrong, so i would argue that buying is the bigger gamble, especially if leverage is involved.

Also consider that this is a property forum so the bias will be towards buying. You wont find anyone on the Subaru owners forums telling you not to buy a Subaru will you.

Buy if you can justify it to yourself, dont buy if you feel left behind in a hype you cant explain or reason with.

 

My personal take is that the market is a bit too hot right now. Another thread referenced a post on Reddit by (I think) a buyer's agent who complained that vendor expectations were being unrealistic, though there seem to be people willing to pay that.

I'm inclined to take Buffett's advice, be fearful when others are being greedy, and sit things out until the market cools.

I don't know what's going to drive the predicted 20% to 30% gains: Property is already expensive on a number of metrics in Sydney and Melbourne; interest rates were cut to 0.1% about six months ago, so that's priced in; the Covid support package has been wound back in the last few weeks; immigration is unlikely to happen this year; and wage growth is slow.

Where's all the money going to come from?

A lot of predictions (mine included) are people hoping for what suits their own self-interest.

That said, I've been consistently wrong about the housing market for years, so don't trust me!

 

Cause of boom is low interest rates. Rba says not increasing for years

Most economists predict 10% - 30% increase over next 2 years.

Buy.

It is a bad time to buy and will not get better

 

Thank you for your logical reasoning. I think im going to wait it out. As it is we are being pushed to new estates. Worse case scenario i buy a land a few streets away from where i can buy now in a new estate for cheaper then now so i think its a win win.

 

Well, a house i verbally offered 610 for was laughed at. It sold for under 600k
Another house i offered 600 for sold for 572.
An agent who is known not to sell for within their range has sold within their range.
I personally see it cooling down a little. Maybe it was just last week not sure but, i just cant imagine this boom not being natural and lasting too long.

I cant imagine a massive drop but i do believe it will return late 2019 levels.

 

Can you extend yourself to Lalor? Or will your borrowing capacity not allow it?
If not then who told you that? A bank or broker?

 

Can you afford to be wrong? Say you read it wrong and you're forced to rent for 5-15 years waiting for the next cycle to kick off - would you be ok with that?

 

Just be careful that you are not seeing a taper because you want to.