Knowing what you know, would you buy a ppr in your area right now if you woke up tomorrow to find yourself almost broke, with your entire wealth being the money for a low deposit? What would be your strategy?
For the sake of keeping on point, we can assume there are no family considerations.
I'd happily buy right now if I could find a property that met my criteria at a price I was happy with. I did exactly this a few years ago when nothing at all was selling in my suburb, and got a great bargain which is now worth plenty more than I paid.
Conviction of answer may depend on which city/area you were talking about. But for Sydney, in the circumstances you outline, I would say a qualified "yes", qualifications being that I found a place that I liked, and at a price I could afford without over-stretching etc, and I was looking to own it for the next 7-10 years at a minimum.
Even if the market stagnated and/or fell a bit (like it did in Sydney in 2004/05), you would still probably save enough or more to offset that through being exposed to low interest rates on your mortgage for longer by buying now vs later - especially if you don't borrow too much and aim to pay off the loan in < 10 years. And down the track you would be laughing whichever way things went.
For Aussie property bears, "denial", is not just a long river in North Africa.....
Knowing what you know, would you buy a ppr in your area right now if you woke up tomorrow to find yourself almost broke, with your entire wealth being the money for a low deposit? What would be your strategy?
For the sake of keeping on point, we can assume there are no family considerations.
I'm settling on a purchase in SEQ at the end of this month. I will use that property as a home in the near future. I also tried to buy another in Surfers but another buyer wanted it more than I did.
Your motto has to be "If you can't buy at the right price then walk away"
There are markets though where I would be very reluctant to buy at this moment. Essentially it depends what is on offer and at what price, and can that price be justified.
If I awoke with say only a 5% or a 10% deposit on a house would I buy - that would depend on my age. At 25 yes I would, at 65 no I wouldn't, in between those ages it would depend on whether I really wanted a home.
Stinkbug: thank you for your insight, I do appreciate it.
The question was specific to the circumstance though. This is probably my fault as I've found I'm not very clear when posting on a phone. Would your choice change if you were broke, single, broke and single lol ?
What's your take on the market for someone in that position
Sydneyite: great response. Thank you for that. I'm guessing you might be on a decent packet
Peter: It's great to hear that you recently bought a place
I'm sure you bought well. As always, your post has given me something additional to think about, and I really appreciate that.
Knowing what you know, would you buy a ppr in your area right now if you woke up tomorrow to find yourself almost broke, with your entire wealth being the money for a low deposit? What would be your strategy?
For the sake of keeping on point, we can assume there are no family considerations.
I guess it would depend a lot on how safe I thought my job was. Also assuming I could get finance as well as raise a deposit.
I suspect this question is really asking if people thought market conditions were right to buy a PPR.
It might actually be the wrong question. I'd be asking myself the following:
1. Do I intend to stay here for the next 10 years? 2. If not, is this dwelling going to nett me at least 3% after costs as a renter?
If no to both questions, then don't buy.
3. Am I going to be put under a lot of stress paying this off? Note this is based on your circumstances! Some people can easily pay 50% of their reliable income. Others have commitments such that 30% is a stretch and their income is not so reliable to boot.
If yes, then seriously consider not buying. Save some more deposit first.
4. Would I be in deep shit if interest rates went up by 3% over the next 2 years?
If yes, consider fixing half the loan for 5 years or saving some more deposit first. (You don't want to fix it all, because you want the option to get as far ahead on the payments as you reasonably can.)
Returning to the market timing thing, I'd say market timing is best left to the speculators. Nobody really has much idea what prices are going to do over the next 10 years. But you do know that if you buy a PPR and bash the loan hard for the next 10 years, you will be in a solid position with respect to whatever the market brings to the table in the next 10 years.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Conviction of answer may depend on which city/area you were talking about. But for Sydney, in the circumstances you outline, I would say a qualified "yes", qualifications being that I found a place that I liked, and at a price I could afford without over-stretching etc, and I was looking to own it for the next 7-10 years at a minimum.
Even if the market stagnated and/or fell a bit (like it did in Sydney in 2004/05), you would still probably save enough or more to offset that through being exposed to low interest rates on your mortgage for longer by buying now vs later - especially if you don't borrow too much and aim to pay off the loan in < 10 years. And down the track you would be laughing whichever way things went.
Qualified opinion... . What makes you think you are qualified to give a qualified opinion.
Stinkbug: thank you for your insight, I do appreciate it.
The question was specific to the circumstance though. This is probably my fault as I've found I'm not very clear when posting on a phone. Would your choice change if you were broke, single, broke and single lol ?
What's your take on the market for someone in that position
Sydneyite: great response. Thank you for that. I'm guessing you might be on a decent packet
Peter: It's great to hear that you recently bought a place
I'm sure you bought well. As always, your post has given me something additional to think about, and I really appreciate that.
If I were broke and/or single I wouldn't be able to buy anyway, but I'm neither so it doesn't really matter anyway.
I don't consider myself a bull however, even if I had a reasonable deposit, I would not buy a ppor in my area today. If I had IPs I would be very tempted to sell down some of my interests.
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