Is now the time to buy property?

Choosing when to buy property requires careful investigation — close attention should be paid to capital growth trends, home loan interest rates, dwelling prices and up-and-coming infrastructure projects.

For many Australians, the questions is not “if”, but “when”. So, is now the time to buy property? Recent findings from the Real Estate Institute of Australia (REIA) indicate the answer is yes.

Housing finance remains steady

The Australian Bureau of Statistics’ (ABS) latest housing finance figures indicate a period of stability.

The overall value of dwelling commitments increased one percent in seasonal adjusted terms, month-on-month to June, according to ABS figures released this month. Owner-occupied house commitments increased in value by 1.8 percent, seasonally adjusted, over the same period. This is ahead of the value of investment housing fixed loans (-0.3 percent).

It appears that many Australians are making the most of competitive home loan rates in order to get a foot on the property ladder.

Interest rates to remain stable

When completing home loan comparisons, Australians will need to consider what their future repayments could be. While interest rates are incredibly low now, there is potential for them to rise, in line with the Reserve Bank of Australia’s official cash rate.

However, the REIA has said the ABS’ housing finance figures “reflect a stable market in which interest rates should remain on hold”.

“The June 2014 lending figures indicate a stable market and taking into consideration the jump in unemployment to a 12 year high, signal a period in which interest rates should remain at their current levels,” said Peter Bushy, REIA President.

In trend terms, the number of owner-occupied finance commitments (excluding refinancing) increased in New South Wales, the Northern Territory, Queensland, South Australia, Tasmania and Western Australia. The Australian Capital Territory and Victoria recorded dips in owner-occupied financing commitments.

Best spots to buy

With low interest rates on the horizon for some time, choosing where to buy is the next step.

Capital city dwelling values have been trending higher since June 2012, according to the RP Data-Rismark July Hedonic Home Value Index Results. 

Sydney’s dwelling prices increased two percent quarter-on-quarter to July 31, while Canberra (2.1 percent), Darwin (0.8 percent) and Melbourne (1.8 percent) also experienced a lift in values. 

RP Data and Rismark named Canberra the best performing capital city, while the South Australian capital of Adelaide was the worst.

Alongside capital growth trends, attention should be paid to local amenities and infrastructure developments in a desired area.

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