Experts Interpret: Why Now Is a Good Time to Buy a New House?

The latest research from one of the world’s largest banks reveals that a record number of Australians had plans to purchase a new house before the COVID-19 crisis erupted.

Data from Rabobank shows that nearly one-third of respondents had considered first-time upgrades, downsizing, relocating, or entering the real estate market, which would provide a significant boost to the economy.

Experts suggest that now may be an excellent time to proceed with these plans if potential buyers have not been severely affected by the coronavirus crisis.

With prices decreasing and supply increasing, it creates more opportunities for bargaining, as interest rates remain low, and dissatisfaction with existing housing is growing due to prolonged periods of isolation.

Glenn Wealands, Customer Experience Manager at Rabobank, said, “In our survey conducted in the first quarter of 2020, we found that 29% of Australians expressed their intention to buy a new house within the next two years, marking a historic high.”

Wealands also stated that many people demonstrated good financial management before the pandemic, with substantial savings, which gives them an understanding of what they can afford. People now see the market as presenting good opportunities and perhaps fear missing out.

Nerida Cole, Managing Director of Dixon Advisory, advised saving a 20% deposit.

According to Cole, many people are eager to buy but question whether it is the right time. She said, “It entirely depends on a person’s job security. People need to be honest about their employment and industry, and if there are concerns about their job, they need to be cautious about making significant commitments.”

“The advantage now is that it’s a buyer’s market, and if sellers are not participating in price negotiations, buyers can walk away because it will be easy to find another property. Many people genuinely want to sell right now, whether it’s investors looking to exit the market or those facing financial pressure, so there are good opportunities.”

Buyers now have the opportunity to negotiate with banks for better terms or rates, especially if they already have substantial savings.

They should also consider converting savings into cash to be able to seize opportunities quickly.

Cole said, “Buyers are definitely in demand now. Especially after eviction bans are lifted, we may see more properties entering the market for sale. As long as you do your due diligence, you’ll be in control.”

Justin Doobov from Intelligent Finance believes that now is a good time to buy, especially when upgrading to a more expensive property.

He said, “People have spent a lot of time in isolation at home and are now realizing the shortcomings of their current homes and wishing to move to better places.”

“Now is a good time to prepare for purchases because there will be plenty of properties on the market that people need to sell due to unemployment or financial pressure, and they may be ready to lower the prices. But my advice is always to sell first before buying, so you don’t become one of those desperate sellers.”

Rabobank’s research indicates that the pre-COVID-19 financial situation within communities is reassuring. The survey found that 73% of respondents said they were living within their means, 66% had long-term financial plans, and 62% regularly reviewed their financial situation. 80% of respondents stated that their financial situation was comfortable, which is higher than the 79% recorded in 2019.

Wealands stated, “Given the demand has reached historic highs, now is definitely a good time to assess and review the current situation and opportunities. It’s important to stay engaged and actively evaluate your financial situation rather than being a bystander waiting for the pandemic to fade away.”