Is it worth is to get a
mortgage for a home in this current environment?
There are two parts of
the equation as explored in the last blog.
To buy or not to buy that is the question?
The reasons why it is
the right time to buy.
- Record low interest rates mean that the repayments for the home will amount for more mortgage being paid off. (Less interest eating up you repayments)
- Banks are willing to lend at incredibly low rates (in which case you can shop around for cheaper rates.)
- If you don’t enter now you never will (the argument that Sydney has a housing shortage, because Sydney is the most livable city in the world (that is debatable).)
These are the reasons as
you should not buy.
- Too many speculators in the market.
- Deposit for a 1 bed room apartment in the city is ridiculous (imagine paying $500 000) for a 20 year old apartment in the city with no garage)
- If interest rates suddenly move up then your payments will be effected too (you can’t have your cake and eat it too)
There are also life
style choices to consider too
Single, de-facto couples,
starting a family.
There are many things to
consider for them and their situation.
- When someone is alone they may decide to rent or share a house because they want to travel or explore themselves etc.
- De-facto couples may explore the idea of buying or renting together in order solidify their relationship.
- Families that are starting out that decide to buy a home, to make a nest for their future.
These are some of the
examples of various stakeholders in a housing market. That are represented
here, there are also others to consider too. Eg (speculators, government housing
etc).
To summarise there are
factors for and against buying house and it is dependent on the type of life
style and people wish to live in, that
factors in the purchase of the house.
Next I will talk about the
relationship between housing prices and interest rates.
Till next time.
Coconutman