That is a very good question – and it’s something that I get asked a lot.
Buying a property can be daunting – but even more so when interest rates are high.
As a property investor myself, I get that. After all, investing in property is a significant financial commitment, so it only makes sense that you want to make the smartest decision possible.
The Australian property market has seen steadily rising interest rates over the past few years (due to inflation) – so with news of a potential rate drop, the market is buzzing in anticipation. No one knows if or when, but it’s been the talk of the town.
Now, as a Buyer’s Agent, here’s the answer I tend to give to the question: “Should I wait for the interest rates to drop before buying (or investing in) property in Queensland?”
No. Waiting is NOT the best move.
As the saying goes, the best time to buy property was yesterday and the second best time is now.
I’ve seen this in all my years in the real estate industry and I can attest to it.
So – let’s delve into the reasons why you SHOULD NOT wait for interest rates to drop before buying property. Some factors are far more important to you as a property buyer, which I’ll cover here.
What does the Queensland property market look like?
Okay, first things first, we can talk about the numbers.
While waiting for interest rates to decrease might seem like a good idea, with a forecast of a drop from 4.35% to 3.6% by October next year, it’s worth noting that the property market is still moving, and quite diversely at that:
- National housing values rose 1% this September, so the value of Australian residential property has reached a new record of $11 trillion.
- Brisbane (14.5%), Adelaide (14.8%) and Sydney (4.5%) have hit record-high values in terms of annual growth rates.
- Melbourne (-1.4%) and Hobart (-1.1%), on the other hand, experienced declines in dwelling values.
- Property listings coming onto the market are 2% higher than last year.
All these numbers mean two things for property buyers like you:
- Since the property market looks different across various cities, location location location remains a key priority and
- with more listings in the market, there are more property options that property buyers and investors can choose from.
Both these lead to the point I was making earlier: NOW is a good time to buy property.
Beyond the numbers, there are also more reasons why property buyers need not wait to get into the property market. Let’s go through all the key points that I discuss when I get asked about the best time to buy property in Queensland.
5 reasons why you should not wait to buy Queensland property
Here’s the thing: focusing solely on interest rates can cause you to miss out on property opportunities.
That’s because every individual has unique goals that require unique property investment strategies.
So, let’s talk about the factors that could be affected by waiting for interest rates to drop, shall we?
1. Property prices continue to increase.
From what we’ve seen from the numbers above, residential property values are still increasing. Buying with the higher interest rates today may seem daunting, but delaying your purchase could lead to paying even more for property (especially if you’re targeting The Sunshine Coast, Hervey Bay or Brisbane). The longer you wait, the higher the prices might go – which just negates the potential savings of waiting for a lower interest rate.
2. Lower interest rates will drive more demand for property.
Now let’s say the interest rates eventually drop.
When this happens, more buyers can AND will enter the property market due to improved borrowing power. This sudden surge in demand will intensify the competition and potentially push the prices up even further. In a more competitive market, emotional property decisions are far more common and it’s to secure the right investment property for you at a good price.
By waiting, Australian property buyers are creating a paradox: the more you wait, the more competitive the market gets and the more you may have to pay for your dream property.
3. There is a mismatch between property supply and demand.
Speaking of demand: because of its potential in people, property and of course, the sunny weather, Queensland is already experiencing a property supply shortage driven by both internal and international migration. With fewer properties available and the steadily rising demand, prices are likely to continue increasing regardless of what happens to interest rates.
4. Time in the market matters more than timing the market.
Now this is a common (and valid) principle in property investment. While it’s easy to look at waiting as a way to save money on your mortgage, this perspective shows that the delay may actually be costing you. Over time, the appreciation in property values will likely outweigh any short-term savings that you’re aiming for by waiting for lower interest rates. So, by entering the market sooner, you can start benefiting from the property growth earlier.
5. Buying a property is not an overnight process.
Final point: the whole property buying process takes time.
Even if the interest rates drop next year, next quarter or next month, your future self will still thank you if you start thinking about buying property today. You could start by identifying your property goals, getting your finances sorted and researching the market. Since finding the right Queensland property takes time, any time spent idly waiting can lead to lost opportunities.
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No time to waste when it comes to buying property!
While waiting for interest rates to drop may seem like a good strategy on the surface, it’s a move that may cost you more in the long run.
Since the market is constantly changing, the best thing to do is to focus on the things that you can control: your own goals and personalised strategy when entering the Queensland property market.
So, whether you’re ready to buy now or just getting started on the preparation stage, getting into the market sooner than later will set you up for long-term success.
Are you ready to buy or invest in the Sunshine Coast, Brisbane, Hervey Bay or South East Queensland Property Market?
Worth Property Investing can help.
My team and I are passionate about helping you make the right investments to achieve your financial goals and lifestyle aspirations.
Think of us as your property-buying partner, here to support you in making the ideal property decisions and making the most of Queensland’s booming property market.
As your trusted, licensed Buyer’s Agents, we do everything from searching, connecting, researching, bidding, negotiating and securing the best investment for you.
Please note: This article is not to be considered financial advice and is not intended as financial advice as it does not take into account your specific circumstances. For specific financial advice, speak to your financial advisor.
