Future-proofing your property purchase

Ask any economist or property commentator about what the property market’s going to do in the future and they’ll probably talk about a lot of things, especially peaks and troughs.

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Whatever jargon you hear, don’t despair. Essentially it’s simply about supply and demand.

In simple terms, higher demand (lots of buyers) and lower supply (not enough houses for sale) usually drives up property prices, while oversupply and low demand tends to see property prices flatten out or drop.

It’s all good and rosy if you buy low and property prices start heading up. But if you’ve over-extended your borrowing, bought a property above it's valuation with a low-deposit loan, and the market collapses… you could end up in a tricky situation where you’ve borrowed more money than your home is worth.

As a buyer, the ultimate time to buy is when the market feels as though it’s nearing the bottom of a downturn or beginning to recover. Prices will be lower but beginning to creep up. More buyers will be out there, though, so competition will likely be hot to nab a great deal.

In the end, home ownership doesn’t come with a crystal ball. Stick within your financial limits and work hard at growing equity in your property by paying off your home loan quickly and investing in improvements that will add value. Sitting on the risk-averse side of the fence is often the safest place to be.