Why would you buy a house now?
While I believe that buying a house is one of my longer term goals, right now is hardly the time for an investment in a house. Personally, a lawn mower and a line trimmer are more of priorities for me right now. (Maybe a 4 burner BBQ). But now, as much as I would want to, buying a house is not the priority for me right now.
In the last few weeks I have noticed headlines in the papers saying 'home buying getting easier' then a couple days later, 'its getting harder', then its easier, then harder again. Its been like this all year and its only going to keep going like this. Ironically, some of the commentators are right in saying the best time to buy is when the market bottoms out and prices begin to rise.
My sister in law and her husband in the states purchased a house a while ago and now, they wouldn't be able to sell it for its original purchase price. The same would be true for most people who purchased in the recent times and have seen the values of their houses rise and fall as often and as frequently as the interest rates of their mortgages.
While I would love to stop paying someone elses mortgage I think that I have to be content with the idea for a while longer. Just two years ago now, we almost had a home of our own. Nice place, purchase price of $315,000. As I worked it out at the time, a 25 year mortgage at 100% finance would have been over $1700 a month in re-payments, about $425 a week. Over the past two years though, the value of the house has dropped to just a little over $280,000 and may still be rising again. But I am thankful that we didn't get trapped with a problem asset.
I think the only circumstances I would buy a house right now would be if I won lotto. But since I don't play that frequently, its not going to happen. But it certainly is going to be interesting to watch. I would not be comfortable under the current conditions of the world to be to serious about buying a house.
Then you see places like ANZ and National Bank looking to having potential house buyers coming to them with a 20% deposit. Take a house at the price of $275,000, a 20% deposit is $55,000. So much for the first home buyer getting an easy road into the housing market. It would take some people I know, a long time to get a first home deposit with the rates being asked for from the bank.
The old phrase of Caveat Emptor is as true for this aspect of buying a house as it is for any other transaction. Buyer beware, because in this market, things will change in very quick order. Now if you are going to buy, buy what you can afford.
Buy the small 3 bedroom house, as opposed to the 6 bedroom mansion. Be smart.
In the last few weeks I have noticed headlines in the papers saying 'home buying getting easier' then a couple days later, 'its getting harder', then its easier, then harder again. Its been like this all year and its only going to keep going like this. Ironically, some of the commentators are right in saying the best time to buy is when the market bottoms out and prices begin to rise.
My sister in law and her husband in the states purchased a house a while ago and now, they wouldn't be able to sell it for its original purchase price. The same would be true for most people who purchased in the recent times and have seen the values of their houses rise and fall as often and as frequently as the interest rates of their mortgages.
While I would love to stop paying someone elses mortgage I think that I have to be content with the idea for a while longer. Just two years ago now, we almost had a home of our own. Nice place, purchase price of $315,000. As I worked it out at the time, a 25 year mortgage at 100% finance would have been over $1700 a month in re-payments, about $425 a week. Over the past two years though, the value of the house has dropped to just a little over $280,000 and may still be rising again. But I am thankful that we didn't get trapped with a problem asset.
I think the only circumstances I would buy a house right now would be if I won lotto. But since I don't play that frequently, its not going to happen. But it certainly is going to be interesting to watch. I would not be comfortable under the current conditions of the world to be to serious about buying a house.
Then you see places like ANZ and National Bank looking to having potential house buyers coming to them with a 20% deposit. Take a house at the price of $275,000, a 20% deposit is $55,000. So much for the first home buyer getting an easy road into the housing market. It would take some people I know, a long time to get a first home deposit with the rates being asked for from the bank.
The old phrase of Caveat Emptor is as true for this aspect of buying a house as it is for any other transaction. Buyer beware, because in this market, things will change in very quick order. Now if you are going to buy, buy what you can afford.
Buy the small 3 bedroom house, as opposed to the 6 bedroom mansion. Be smart.
Labels: home buying., House prices, interest rates
posted by Wiremu Bayliss at
9:01 am
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