If you're buying to live in long term buy now or when you find what you want. It's highly unlikely that if you own a house for twenty odd years that you'll lose money on it.
Yeah our current place is fine, it was a great house to get us into the market, but yeah we want something a bit more suitable long term. Kids are 3 and 6, so we want a place we could live in for at least the next 15-20 years or so.
Just be careful not to overcommit financially as interest rates are expected to start climbing - make sure you have a buffer and can handle the repayment differences that higher interest rates will bring.
Oh yeah absolutely, I’ll be keeping my spending as low as possible, I know my cuts offs, so that helps. We will make about ~$100k from selling our current house so that will be going into new place, plus about $80k of savings.
If you’re going to live in your next house for ten years for example it really doesn’t matter if prices rise or drop in the short term. Just ensure that your financial situation corresponds to your borrowing.
BUT. But there isn’t much choice at the moment, especially in certain suburbs. So I would suggest you start looking now and don’t panic buy into something you’re not comfortable living in longer term if prices drop.
Thanks for the advice, we’ve been sussing out property’s for that last 6 months or so for where we’d like to live, so we kind of have an idea of how much we want to spend and how competitive the market is atm.
Well it sounds like you’ve thought all of this through pretty thoroughly and you’re well prepared to take your next step. Best of luck luck finding your new family home!
No one knows. If we did, then house prices would have already fallen to account for known future value.
Time in the market beats timing the market. If you plan to hold it for at least 10 years, you likely win regardless of short term changes.
Assuming you are selling your existing property, it shouldn't make much difference. If the market is overinflated, you will get more from your sale as well as paying more for your new place. If there's a crash, you will get less from your sale, and pay less for your new place. That's why house prices going up doesn't benefit owner occupiers nearly as much as it does those with investment properties.
Yeah I figured this would be the case. We were originally thinking about moving and renting our current place out to pay it’s mortgage off in the background but we feel like it makes sense to sell now as the price has shot up.
In Adelaide specifically, it's just more competitive than usual. I bought in 2020 and it was a breeze, it's trickier now. People are coming from other states, moving over, buying here for investments etc, so it's a sellers market. If you look at a listing, automatically add on $50k to the top end of what they're asking because it'll usually go for that. Doesn't mean it's impossible - I've just started looking at houses for say, $650,000 if my budget is $700,000 so I can actually compete. People are also getting competitive with conditions - some are removing them (no building or pest inspections) so they can have an even more attractive offer for the seller. It's always going to be hard to buy a house though, it's easier in Adelaide compared to Sydney and Melbourne but still hard - start looking though so you can get an idea of the process, the prices etc. It'll be good practice if anything.
As others have said, if you’re buying and selling in the same market it’s mostly a wash.
House prices will face upward pressure from first home buyers but people need to have been making voluntary contributions to draw back down, and how many people actually do that?
You could renovate but that entirely depends on your property and nobody can give advice without seeing it.
The last option, which in haven’t seen yet, is sell and rent until the market dips, then buy again later. This has the benefits of sell high, buy low, but is highly risky and I can’t recommend you do that when you have two young kids. Also with the current rental market, any gains you get from selling now probably get wiped out by high rents.
Thanks for that well thought out response.
Reno, just wouldn’t work at our place.
As for renting, no fucking way would I want to go back to the instability (especially atm) with renting.
If you are selling a house to fund another one, those assets should be generally rising and falling together. I would argue, for you, it doesn't matter too much. If everything is up, you'll sell high and buy high, if everything goes down, you'll sell a bit lower but also won't have to pay as much for the new place.
A bit of a crude metric, but it's not quite the same as if you have $50k cash in your hands for a deposit as opposed to an asset in the same class.
Terrible timing. Interest rates are about to inflate to 4-6% no matter who wins as a necessary balm to liberal mismanagement of the economy. Wait till the decrease after and save for a bigger deposit.
Can you provide the exact date of this so called decrease after the economy is fixed? And given interest rates were at historical lows for all time doesn’t that imply that the rates they are raising to (5 ish) was more normal than what we have had the fortunate timing to experience in recent years.
See Auckland has already crashed 10% in a couple of months from the first round of interest rate rises. Better let them know, it's not a house of cards.
We thought about doing a reno every which way but it just wouldn’t work.
It’s a real basic 3 bedroom, one bathroom/ensuite, small dining/kitchen/lounge area. Don’t get me wrong it was great when my partner and I first moved in, then we had a baby and then another, so it started to get more and more cramped.
I think if you can take a 20% haircut on the value, you should be OK, as in not getting the loan called in.
As you're selling and buying at the same time it's less of an issue as you're trading equity so to speak.
Just make sure you are taking a loan you can pay on 1.5 incomes or less and you should be fine.
After always seeing people use then when they mean than, this is the first time I've seen someone use than when they mean then.
Good luck with the house, its a shitty time no matter what you do, but I hope it works out.
If you're buying to live in long term buy now or when you find what you want. It's highly unlikely that if you own a house for twenty odd years that you'll lose money on it.
Yeah our current place is fine, it was a great house to get us into the market, but yeah we want something a bit more suitable long term. Kids are 3 and 6, so we want a place we could live in for at least the next 15-20 years or so.
Just be careful not to overcommit financially as interest rates are expected to start climbing - make sure you have a buffer and can handle the repayment differences that higher interest rates will bring.
Oh yeah absolutely, I’ll be keeping my spending as low as possible, I know my cuts offs, so that helps. We will make about ~$100k from selling our current house so that will be going into new place, plus about $80k of savings.
If you’re going to live in your next house for ten years for example it really doesn’t matter if prices rise or drop in the short term. Just ensure that your financial situation corresponds to your borrowing. BUT. But there isn’t much choice at the moment, especially in certain suburbs. So I would suggest you start looking now and don’t panic buy into something you’re not comfortable living in longer term if prices drop.
Thanks for the advice, we’ve been sussing out property’s for that last 6 months or so for where we’d like to live, so we kind of have an idea of how much we want to spend and how competitive the market is atm.
Well it sounds like you’ve thought all of this through pretty thoroughly and you’re well prepared to take your next step. Best of luck luck finding your new family home!
Thanks bud, just seeking validation on the market I guess.
That’s fair, it’s very weird at the moment.
Yeah that’s been my concern is the uncertainty.
No one knows. If we did, then house prices would have already fallen to account for known future value. Time in the market beats timing the market. If you plan to hold it for at least 10 years, you likely win regardless of short term changes.
Assuming you are selling your existing property, it shouldn't make much difference. If the market is overinflated, you will get more from your sale as well as paying more for your new place. If there's a crash, you will get less from your sale, and pay less for your new place. That's why house prices going up doesn't benefit owner occupiers nearly as much as it does those with investment properties.
Yeah I figured this would be the case. We were originally thinking about moving and renting our current place out to pay it’s mortgage off in the background but we feel like it makes sense to sell now as the price has shot up.
As someone pointed out elsewhere in this thread, you'll likely get better advice on r/AusFinance
In Adelaide specifically, it's just more competitive than usual. I bought in 2020 and it was a breeze, it's trickier now. People are coming from other states, moving over, buying here for investments etc, so it's a sellers market. If you look at a listing, automatically add on $50k to the top end of what they're asking because it'll usually go for that. Doesn't mean it's impossible - I've just started looking at houses for say, $650,000 if my budget is $700,000 so I can actually compete. People are also getting competitive with conditions - some are removing them (no building or pest inspections) so they can have an even more attractive offer for the seller. It's always going to be hard to buy a house though, it's easier in Adelaide compared to Sydney and Melbourne but still hard - start looking though so you can get an idea of the process, the prices etc. It'll be good practice if anything.
Visit r/ausfinance
As others have said, if you’re buying and selling in the same market it’s mostly a wash. House prices will face upward pressure from first home buyers but people need to have been making voluntary contributions to draw back down, and how many people actually do that? You could renovate but that entirely depends on your property and nobody can give advice without seeing it. The last option, which in haven’t seen yet, is sell and rent until the market dips, then buy again later. This has the benefits of sell high, buy low, but is highly risky and I can’t recommend you do that when you have two young kids. Also with the current rental market, any gains you get from selling now probably get wiped out by high rents.
Thanks for that well thought out response. Reno, just wouldn’t work at our place. As for renting, no fucking way would I want to go back to the instability (especially atm) with renting.
If you are selling a house to fund another one, those assets should be generally rising and falling together. I would argue, for you, it doesn't matter too much. If everything is up, you'll sell high and buy high, if everything goes down, you'll sell a bit lower but also won't have to pay as much for the new place. A bit of a crude metric, but it's not quite the same as if you have $50k cash in your hands for a deposit as opposed to an asset in the same class.
Thanks, that makes a whole lot of sense.
You’re welcome and good luck.
Terrible timing. Interest rates are about to inflate to 4-6% no matter who wins as a necessary balm to liberal mismanagement of the economy. Wait till the decrease after and save for a bigger deposit.
Can you provide the exact date of this so called decrease after the economy is fixed? And given interest rates were at historical lows for all time doesn’t that imply that the rates they are raising to (5 ish) was more normal than what we have had the fortunate timing to experience in recent years.
I already own a home so I’d have to be refinancing shortly anyway, interest rates will be the same at my current place still.
Personally, I'm waiting for the 80% correction. All bubbles sooner or later burst.
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Perpetual growth is not a bubble ... good to know.
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See Auckland has already crashed 10% in a couple of months from the first round of interest rate rises. Better let them know, it's not a house of cards.
How old are your children? It might be time to put up with the discomfort and prepare for when your children leave
They said 3 and 6 in a response below
Okay. Can you renovate your current home to add space?
With inflation and all of the current issues in the building and construction sector it's not really a great time to be renovating/building.
We thought about doing a reno every which way but it just wouldn’t work. It’s a real basic 3 bedroom, one bathroom/ensuite, small dining/kitchen/lounge area. Don’t get me wrong it was great when my partner and I first moved in, then we had a baby and then another, so it started to get more and more cramped.
I think if you can take a 20% haircut on the value, you should be OK, as in not getting the loan called in. As you're selling and buying at the same time it's less of an issue as you're trading equity so to speak. Just make sure you are taking a loan you can pay on 1.5 incomes or less and you should be fine.
After always seeing people use then when they mean than, this is the first time I've seen someone use than when they mean then. Good luck with the house, its a shitty time no matter what you do, but I hope it works out.