On my High Horse – Giddy Up!

Don’t wait to get into the property market if you can afford it.
Photo: Tatiana Gerus

I’ve decided to jump on that high horse again and have a bit of a rant about the misinformation being dished up in the property market at the moment.

It seems every so-called expert and his dog has an opinion on the real estate industry and the economy.

Admittedly, I’ve sounded like a big of a know-it-all at times, pretending to know about economics when I’m no economics major. But what’s really getting up my goat are these misinformed experts advising people to rent instead of buy under the belief that there will be a better time in a few years when the market collapses.

In reality, the market hasn’t sustained a collapse since property prices have been recorded.

“I have seen first-hand what happens to those who wait [to buy a property].”

My parents bought their first property in the 60s for a few thousand pounds – in Collingwood, by the way, which is now home to $650,000 plus single-front Victorian terraces.

In 1973 we moved to the northern suburbs near Heidelberg and they paid $14,000 in an area where a typical house will now set you back in excess of $800,000.

So why the hell am I on this goat or horse or whatever I’m on?

Because I have seen first-hand what happens to those who wait.

When I was a real estate agent back in the day, a really nice family came to me and asked “Hey Peter, we’re looking for a four bedroom, two bathroom house in pretty good condition in Greensborough. Have you got anything?”

After searching and ringing around, I quickly came to the realisation that $240,000 wasn’t going to be enough to buy what they were after.

I said “Unfortunately John and Betty (not their real names) you’ll need to stretch to $260,000, look for a smaller home, or look for a home in a slightly cheaper area.”

To this they said, “That’s okay, we’ll rent for another year and wait for the prices to fall.”

“Prices didn’t fall… and this lovely family missed out on their opportunity to get into the market.”

And guess what? Prices didn’t fall. If anything, the property market commenced one of its longest sustained growth periods and this lovely family missed out on their opportunity to get into the market.

The moral of the story is this: had this couple bought a property, any property (provided the location and residence were of a good quality), they would have seen its value rise. Later in time, they would have been in a position to trade up or down.

My argument is to forget the naysayers and get into a property you can afford, buy for the long-term (at least five years) and don’t be ashamed or afraid to start small with something like a one or two bedroom flat (I love flats!).

Yes you will be paying a mortgage and toughing it out for a few years, but at least you’ll have a hedge against inflation and property price rises.

If you are thinking of buying selling or investing and would like a FREE 5 minute chat
with Street News Director Peter Sarmas, please contact him on 0418 740 606
or via email at [email protected]