Should you buy or rent in Victoria now?

 

 

Should you buy or rent in Victoria now?

 

Whether you buy or rent in Victoria now is a real question as competition and interest rates intensify. Various factors influence decisions like personal preferences, financial considerations, and the current state of the real estate market. In today’s Victorian real estate market, prospective homebuyers and renters face a complex landscape shaped by economic trends, housing supply and lifestyle choices.

 

Economics

 

We constantly hear about economic conditions in the Victorian real estate market but many people ignore how these variables impact them personally. Factors such as interest rates, employment stability and overall economic health should be carefully thought through before making a real estate decision.

 

We all want to live where we have family and friends but often these suburbs are too expensive and we need a different plan. Rather than stretching to finance a property to live in, now may be the time to rentvest. The economic uncertainties of interest rates, unemployment and inflation impact our ability to plan and renting can provide more flexibility. Enjoying the security of property ownership, investment income and living where we feel a part of fully addresses the desire to own property.

 

Housing supply

 

The interplay between housing supply and demand heavily influences the real estate market. In Victoria, the demand for housing is outstripping the supply and home prices are rising fast. In this scenario, renting may be a more affordable short-term option, allowing individuals to wait for a potential market correction before committing to a purchase. However, many have a Fear Of Missing Out (FOMO).

 

This competitive market has seen prices rise in suburbs that once were less desirable. People are more accepting of neighbouring suburbs and realise buying there is better than not buying at all or moving too far away.

 

It is wise to start considering these rough diamonds because the expensive suburbs are not going to drop drastically. That is because as markets rise properties build equity for their owners. Once equity exceeds 20% there is more stability for owners – providing those vendors don’t over-extend elsewhere.

 

Market trends

 

Analysing market trends is crucial to gauge the direction in which property values are moving. However, real estate is impossible to predict. Consulting real estate professionals and staying updated on market reports can help individuals anticipate whether property values are likely to appreciate or depreciate.

 

If the market is at the beginning of an upward trajectory, buying may be a wise investment. You must, however, consider how long the prices have been rising in that area. There is a point at which you may be close to the top of that cycle and with high interest rates, you don’t want to be caught out.

 

Downturns are often predicted by experts and they should logically occur. However, they are often not as obvious as rising markets and do not have the same obvious economic factors. Many people have held off waiting for the fall only to see the market rise and lose out. The increasing interest rates had everyone believing the end was near but it is still rising. A better strategy is to look at other suburbs where the rise is starting.

 

Financial considerations

 

The financial aspect is a key factor in the decision-making process. As a buyer, you should evaluate your financial stability, creditworthiness and the long-term implications of a mortgage. Renting offers flexibility and maybe a more suitable option for those with uncertain financial situations or short-term housing needs. Additionally, as a buyer, you must consider additional costs like stamp duty, maintenance and insurance, which can significantly impact the overall affordability of homeownership.

 

Lifestyle, flexibility and part of your superannuation plan

 

The decision to buy or rent is not solely based on financial considerations. Lifestyle choices and flexibility also play a crucial role. If an individual values the stability and permanence associated with homeownership and plans to stay in the same location for an extended period, buying may be a more suitable option. However, if flexibility and the ability to easily relocate are priorities, renting provides the freedom to move without the obligations of property ownership.

 

You can have both but in Australia today you need to plan according to what you have to work with. Home ownership is valuable for many reasons but arguably the most important is security in older age – like superannuation. Having an asset that ensures consistency and even support for aged care is equal to superannuation. Be flexible in your approach to property ownership and treat it like superannuation.

 

When you decide

 

In today’s Victorian real estate market, the decision to buy or rent depends on a combination of economic factors, housing supply and demand, market trends, financial considerations, and individual lifestyle preferences. Prospective buyers and renters should carefully assess their current situation and future goals to make an informed decision.

 

Consulting with real estate professionals, conducting thorough research, staying informed about market conditions and being flexible will empower you to navigate the complexities of the Victorian real estate landscape and make a choice that aligns with your current and future needs and aspirations.