Homeownership is a dream for many adults today, but it also seems like a goal that’s increasingly difficult to achieve. Home prices are constantly changing, mortgage rates are fluctuating, the property market is extremely competitive, and the economic environment doesn’t seem to be helping. All things considered, making a property investment decision is particularly challenging. To that end, here are some factors that might help you decide whether you should buy property in 2022 or wait for 2023:
The current state of the market
The last couple of years have truly been turbulent for the global property market, but the environment still presented a couple of surprises. Despite the increasing inflation and economic uncertainties, the demand for property was higher than ever. However, with high demand also came surprisingly low supply, with many calling it a housing supply crisis. As a result, properties are now priced at the peak of their value, listings come and go very quickly, bidding wars aren’t uncommon, and buyers often go above the asking prices. This isn’t expected to change in the near future.
Property price predictions
The current competitiveness and high prices are among the main reasons preventing buyers from investing in property today. This begs the question of a potential crash in the market, along with sudden declines in property prices. While history may dictate similar situations, we’re not likely to repeat them. Property prices aren’t predicted to drop anytime soon. In fact, experts expect prices to continue rising well into 2023 and beyond. However, the rise will be slower and steadier this time, meaning that there likely won’t be any huge price increases.
Interest rate fluctuations
Many places around the globe saw quite favorable mortgage rates in recent years. This is especially true for the US, where the average 30-year fixed mortgage rate saw record lows at 2.65%. Unfortunately, the rates are only expected to rise in the future, growing at around 0.5% each calendar year. Nearing the end of 2022, it’s estimated that rates will range between 3% and 4% across the country. While these rates are higher compared to 2021, they are still relatively low in terms of mortgage rates in general, and may still be suitable for many buyers in 2023.
Finding help when buying property
In countries such as Australia, on the other hand, it’s not uncommon for buyers to find some help when purchasing property, especially if it’s their first large investment. Local buyers will often hire an experienced property lawyer from Sydney to help them in making the right decision. These experts have extensive knowledge of Australia’s fast-paced property market and are able to ensure buyers are in the best possible position to get their deals across the line. If you need some practical and relevant advice when making a purchasing decision, consider finding similar professionals in your area.
Reasons to buy property in 2022
Even if you are uncertain about the current state of the market, there are still a few compelling reasons you may want to invest in property now. Considering the fact that interest rates are still relatively low and home prices are expected to continue rising, purchasing now may be a better financial investment for many buyers. Rent prices are rising across the world as well, which means that deciding on homeownership can come with additional savings. But it’s important to remember that there likely won’t be a very large difference in terms of expenses.
Reasons to wait for 2023
With these debatable market conditions in mind, there might not be an urgency to buy property this year after all. A lower housing supply shouldn’t encourage you to make a decision you aren’t emotionally and financially prepared to make. Supply and demand fluctuate constantly, and there will always be attractive properties on the market, especially if you consult professional real estate agents who are able to meet your needs. If you’d like to invest in a dream home you plan on living in for the long term, then waiting to find the most suitable property may be best.
While the market may change suddenly, property purchases are still entirely up to you. Personal factors such as your age, finances, and overall preparedness for homeownership should always be considered.
