PHOTO: Mosman, Sydney NSW. (Photographer: Brendon Thorne/Bloomberg via Getty)
It’s a bold statement, but it’s true.
For some of you who are reading along right now, 2020 is absolutely the worst possible time you could consider buying a property.
In fact for these people, moving forward with a real estate purchase this year would have the potential to cripple them financially, not just now but well into the future.
Sounds dramatic, right? It is… but here’s the truth. This statement rings true in 2020.
It was also true last year. And the year before that. And in 2015, 2010, 1985, 1972…
The reality of real estate is that there is no “best” time or “worst” time to buy property.
Here’s why
It’s likely that you’ve heard me talk about the drivers of property price growth over the years.
There are so many things that determine a property’s price performance and growth trajectory, many of which are well outside of your control, and which also have nothing to do with the property itself.
These include, but are not limited to:
- The economy – the performance and state of the broader economy impacts people’s ability to buy and sell property as well as …
- Consumer Confidence – when people feel comfortable about their financial situation and their future job prospects are more likely to make big purchases like moving home or buying investment property.
- Employment levels – if the community at large is experiencing high levels of unemployment, then fewer people can afford to pay a mortgage, which reduces demand for property
- Government policy – aspects to do with tax, depreciation and home ownership grants will work to boost or reduce demand for property, particular new property in recent years, which is where the federal government’s primary agenda has been.
- Population growth – or household formation to be more exact as when more people moving into an area equals more demand for housing, whether it’s to buy or rent.
- Local Demographics – things like average incomes, average age, household structure, crime rates and employment opportunities.
- Supply – The basic economic principle of supply and demand is a fundamental property market driver of price growth.
- Availability of credit – property investment is a game of finance with some houses thrown in the middle, but even owner occupier demand is very much driven by the availability of finance and the cost of money, in other words interest rates.
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