A perfect storm of rising interest rates and a jittery economy have been impacting home owners and investors, leaving many wondering when is the right time to buy property in Adelaide?
The answer is: Yesterday!
The second best answer is today (or as soon as you can).
Property continues to be one of the safest investments you can make in Australia.
Hence, the prevailing sentiment is that the best time to buy property in Adelaide is as soon as you can possibly afford it.
It’s true that housing prices nationally have suffered a correction after the record post-pandemic boom.
But in Adelaide, that correction was scarcely noticed, with prices easing just 2.4 per cent from peak to trough after soaring an eye-watering 44.7 per cent!
Since that nadir fell in March this year, prices have climbed a further 4.6 per cent.
Anyone waiting for a more significant correction of greater than 10 per cent as was experienced on the eastern seaboard will be sorely disappointed.
It’s been a tough lesson to learn for some but happy and positive reinforcement for others who followed one of the golden rules of property investment.
That is that property is a sure bet as a long term, sustainable investment and that the sooner you buy into the market, the sooner you start realising capital growth.
Here’s why:
Resilience
History teaches us some valuable lessons.
Historically, property has been one of the most resilient investments, even in times of economic turmoil.
CoreLogic’s national Home Value Index (HVI) recorded a sixth consecutive month of growth in August, rising 0.8 per cent.
In Adelaide, that figure reached 1.1 per cent.
The period of property prices falling in Adelaide is well behind us. It was barely a ripple.
Growth
Property prices have risen steadily in recent times and there is nothing to suggest that trend won’t continue.
And while we’re unlikely to see a repeat of the boom that propelled the Adelaide market to its biggest rise in 14 years, continued growth is all but assured.
By delaying your purchase, you risk paying significantly more for your property in just a short space of time.
Interest rates
The RBA has kept the cash rate steady at 4.1 per cent since June.
While there are many indicators that rates have reached their peak, it’s much harder to forecast when they will begin to ease.
By waiting for them to do so, you risk offsetting that gain by paying more for your desired property.
A reduction in rates will bring more buyers to market, pushing house prices up.
Conversely, buying now and seeing your investment appreciate counters the cost of higher rates.
Building equity
The sooner you buy into the market, the sooner you begin building equity in your investment.
This equity can be used for future investments or emergencies.
Stability and security
Homeownership brings stability and security to your family.
That’s because it gives you a rock solid asset that will most likely appreciate.
By paying off a home loan, you invest in yourself and your own investment goals rather than someone else’s.
You also become master of your domain.
You are no longer behest to a landlord’s control over your living arrangements and skyrocketing rental prices.
Tax benefits
If the property you purchase is also your home, you stand to gain a significant tax break in terms of the appreciation of your investment.
That’s because the Australian Tax Office gives you a Principal Place of Residence (PPR) exemption from the capital gain of your property.
The only proviso is that you live in that property for a minimum 12 months.
Start small (but start!)
Don’t be afraid to start small when you begin your home ownership or property investment journey.
There are many different types and sizes of property in Adelaide.
Even a seemingly insignificant dwelling can offer a big return on your investment, if you buy wisely, allowing you to build your portfolio or increase equity to put towards your next home.
Build a strategy with your financial adviser and mortgage broker, and then begin the process with expert support around you.
Prepare your finances
Whether it is home ownership or investment, your strategy will be underpinned by a solid set of financials.
Working in partnership with your financial adviser and mortgage broker, you’ll be able to assess your financial position to understand whether your property goals are realistic, and what it will take to finance your objectives.
If you’re ready to go, your broker will crunch the numbers and go to market to find the best loan options for your goals. They will also handle the paper work and make the process as smooth as possible.
If you’re not yet in the financial position to execute on your property strategy, your adviser and broker should set you up with a plan to get there as soon as possible.
When going through the finance process, it is important to maintain employment, have detailed financial records and have minimised other debts where possible.
Get advice now
Adelaide remains one of the best-kept secrets on the Australian property scene.
The city’s ability to hold its property value beyond the boom is evidence of that and testimony to the giant leaps it has made as a desirable, modern place to live over the past two decades.
In comparison with the east coast cities, it remains one of Australia’s most affordable places to buy.
It can therefore be expected to enjoy significantly more growth in the short-term future.
Adelaide’s strong job market, mediterranean climate and quality of life make it an extremely desirable place to live.
The city climbed 19 places to 12th in The Economist’s Global Livability Index in 2023.
If you’re thinking about buying property in Adelaide, there really are no excuses to delay any longer.
But you’ll need to find the best possible mortgage to sweeten the deal.
That’s where Calder Finance Broking comes in.
CFB are specialists in the mortgage broking business.
We deal with hundreds of lenders, finding the finance solutions for you.
Our commitment is we will not just prepare you for applying for a home loan, we will walk with you through every step of the process, securing you the very best deal available.
We’ll also advise you on the most prudent mortgage strategies for your unique circumstances.
We pride ourselves on leading our clients into the future with structure, financial stability and confidence.
Contact us today to discuss all of your financial needs and concerns.
The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.
Written by David Titley from Calder Finance Broking, for more information please visit the Calder Finance website. Please note that Calder Finance Broking Pty Ltd is a Corporate Credit Representative of BLSSA Pty Ltd ABN 69 117 651 760 ACL 391237.
