Should I Buy A House Now Or Wait Until 2025?

Should I Buy A House Now Or Wait Until 2025?

It’s no secret that rising interest rates in previous years have been deterring individuals from buying property but despite what you may have heard, 2024 is looking like a promising year for property investment in Australia.

But is it the right time for you to take the plunge, or should you wait it out until 2025? We’ve done a deep dive into the current property market so that you can make an informed decision on when will be the best time to buy.

Factors To Consider Before Buying A Property In 2024

Interest Rates

These are one of the most (if not the most) crucial factors potential buyers need to consider before purchasing property. Low interest rates may make purchasing a property more affordable whilst rising interest rates may act as a deterrent for your property purchase. Let’s check in with a real life example that might just encourage you to act sooner rather than later when it comes to property investment!

In 2019, Darren and Priscilla came to me looking to invest in property. They were on the fence as to whether or not it was the ‘right time’ to buy.

They went on to purchase a property in Ballarat for $455,000 which on today’s market, is valued at a conservative $600,000.

Had they not purchased, they would have incurred an opportunity cost of $36,000 per year.

Now let’s take a look at Bianca and Ryan.

They recently approached AllianceCorp to purchase an investment property, but were hesitant about interest rates.

After some discussion, they went on to purchase a property at $500,000 on an interest rate of 6%, averaging $30,000 of repayments per year.

Had they waited 12 months to purchase the same property at $600,000 on an interest rate of 5%, they still would have averaged $30,000 of repayments per year.

Why?

Because whether you choose to wait for interest rates to come down or not, your mortgage repayments will be subsidised by the rental income of that property.

How much of the rental income that is subsidised is dependent on the purchase price of the property, not the interest rate.

Purchase price will almost always be cheaper now than in 12 months time so it’s vital that if you’re considering property investment, you purchase when you can next afford to.

Migration Trends

Migration patterns have a huge impact on housing demand and the overall cost of property.

In 2023, Australia experienced a huge surge in overseas migration, and the Melbourne CBD and other urban areas saw the biggest shifts in the rental markets due to this. As per CoreLogic, Melbourne’s CBD saw a 28.9% increase in overseas migration.

As we move into the latter part of 2024, forecasted migration is set to continue and regions like regional Victoria and North Queensland are tipped to see an increase in housing demand which is likely to drive market growth. If you’re looking to invest in either of those areas, now might be the perfect time!

New Developments

The development of new infrastructure has a huge impact on property prices for 2024. Improved transport links and amenities may increase the demand for houses and drive up prices.

When it comes to infrastructure plans, there’s a lot happening across the country! Infrastructure projects like Victoria’s Suburban Rail Loop and the Melbourne Metro Tunnel are significant developments in Melbourne.

Brisbane has the Cross River Rail and in Sydney there’s a Western Sydney Infrastructure Plan underway.

Regional areas also have great opportunities for infrastructure growth including in regional Victoria, North Queensland and South Australia so that local economies can reap the rewards of new infrastructure developments.

Overall Economic Outlook & Property Cycles

Australia’s economic outlook has a significant impact on property prices. A good economic market means there will be an increased demand for housing which will could also bump up property prices. Currently in the property cycle we are right before the boom so if you’ve been thinking about purchasing a property for a while now is a great time to get a good deal!

So Should You Buy Now, Or Wait?

When it comes to weighing up the benefits of buying now or waiting until 2025, it really is a very personal decision to make and it’s always best to invest when you can next afford to.

Whilst current market trends do show that it’s a favourable time for buyers, the decision to purchase now or wait it out is ultimately up to you.

Whilst waiting until 2025 may lead to more favourable market conditions, there’s never a guarantee, and by acting now individuals can capitalise on the current trends to put them in a good position for potential long-term financial gain.

How We Can Help You Make An Informed Choice

At AllianceCorp our team of property investment advisors can help you make the most informed decision for you and your potential investments. Before making a decision, book a consultation with one of our team members to find out more about the 2024 market and what’s predicted to come in 2025. 

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