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Should I Buy a House Now While Competition is Low?

December 20, 2022
should i buy a house now

Key takeaways:

  • Repeated cash rate hikes have discouraged first home buyers from entering the property market.
  • Fewer buyers on the market means there’s less of a chance you’ll have to compete for your dream home.
  • Government grants spots usually fill up fast so take advantage of market conditions to nab one.

Repeated cash rate hikes have put many first home buyer plans on hold. So, you could be wondering, should I buy a house now to reap the benefits with less competition in the market?

In case you missed it, from May to December the RBA lifted the cash rate from 0.10% to 3.10%.

This has no doubt hit many mortgage holders hard, but it’s also discouraged first home buyers from trying to enter the property market.

In fact, current Australian Bureau of Statistics data shows that the number of first-home buyers fell 3.2% to 8,576 in October alone.

That’s almost half the 16,187 first home buyers who entered the market during the January 2021 peak.

So, if you’re looking to buy, how can this benefit you?

Let’s find out.

Less competition and more bargaining power

Here’s the first answer to your should I buy a house question:

From mid-2020 to the end of 2021 we saw a house buying frenzy. And house hunters who were unable to compete had to make do with the leftovers.

But fewer buyers on the market means there’s less of a chance you’ll have to compete for your dream home.

There could also be more favourable homes for you to choose from, without the overcrowded open houses.

And with fewer buyers making offers, sellers could have concerns about offloading their property.

November 2022 CoreLogic data shows the median days a property sits on the market is 35, compared to just 20 days in 2021.

So, if you’ve got your financial situation in order and are prepared to bargain… leverage your powers of negotiation and try for a great price.

Softening property prices

should i buy a house now

High demand in recent years saw property reach eye-watering prices. But over the past three months there’s been a decline around most parts of the country (except in regional South Australia and regional Western Australia).

In fact, national data has shown the biggest annual decline in home values since 2019, with a 3.2% drop over the past year.

In some instances, it could be cheaper to buy than rent. National median weekly rental prices rose by 4.3% in September this year – a record-breaking price hike.

And a recent analysis found that for 518 Australian suburbs, home loan payments were more affordable than renting.

Dodging the high rent prices and choosing to buy in one of these suburbs could be the better move if your finances are in order.

And you might want to get the ball rolling sooner rather than later.

That’s because prices could go up again as early as next year if the RBA pauses rate rises and inflation drops, according to SQM Research’s Housing Boom and Bust Report for 2023.

Government schemes for savings

Taking advantage of government incentives puts the keys in first home buyers’ hands 4 to 4.5 years quicker, on average.

Giving lenders mortgage insurance the big swerve, paired with a low deposit of 5%, is an enticing deal.

And if you’re eligible, that’s what the government’s First Home Guarantee can offer.

Spots are limited though and have been known to fill up fast.

But with fewer first home buyers entering the market, you may have more of a chance of nabbing a spot in the scheme.

Should I buy a house now? Ask Soho Home Loans

So, if you’re ready to step onto that property ladder, get in touch with Soho Home Loans.

We’ve got all the knowledge to help you work out your borrowing capacity and your mortgage options.

We’ll take the confusion out of financing your new home, so you can get on with swooping in on the house of your dreams.

Need more financial advice? 

Browse our finance category. It’s chock full of hacks and advice from industry professionals. And remember to download the Soho app for quicker browsing and property matching. It’s getting you into your dream home faster!

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