You’ll Pay More by Waiting—Why Timing the Market is a Dangerous Game

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Hello, and thank you for tuning in to another episode of the podcast. This week, I’m going to be talking to you about the market at the moment and how time is money and the importance of spending time in the market. So there’s a few different things. That I wanted to break down and go over and use a few different examples from clients and situations that have been happening over the last few weeks.

That way you can get a really good understanding of. How pricing works, where the market’s moving and what’s happening to help you go through the process of understanding when is the right time for you to get in the market and the importance of doing it sooner rather than later at the moment. So obviously.

There’s a lot of people who, you know, talking about, I’m going to get in when it drops, I’ll get in when prices change, I’m going to keep waiting. And there is a lot of people that have been saying that since 2020. And since then, the market has completely changed. Like imagine if you. Had and people did like you get in at 2020 and now you’ve been in the property market for four years How much equity you have inside your home and a mat if you waited now how much more you’re paying for something?

Versus when you could have gotten in getting in at that time. So I’m gonna try and help Breakdown so you can work out the best time for you to get in the market, which is when you can afford it. And when you get in, you cannot time the property market. Nobody has a crystal ball. Nobody knows what it’s doing.

There’s things and factors that you can obviously. Look at and understand like supply and demand, how many people are moving into the state in Perth, how many homes the construction industry can build the rental market. There’s obviously a few different things and factors and even supply on the established market that help us look at that holistically as the property market.

But working out when the best time you to get in is when you can afford it. Now I want to start off with a story from a client that we have had over the last couple of weeks. So we had a client who we got a block on hold and they decided they wanted to wait for the next release to get one on a different street.

Absolutely all good. So we went through, you know, obviously the importance of, you know, we’ve got this block, we’ve got it on hold, which blocks are hard to come across these days. So when you get one on hold, you’ve got to make a decision pretty quick on whether you want to go ahead or not. And the block around the corner wasn’t getting released till about, I think it was about three week difference.

So, you know, we ran through the risks and the pros and the cons, and they decided they wanted this other block in the next released. On the other street, which was all good. So we kept our eye on this estate and contact the land agent. And then that block came available about three weeks later. So we ended up getting that block secured as well for the client, which was a great result.

So we actually got the block that they wanted in the next release. The difference is between those two different releases, the price on the block of land. Went up 30, 000. So there’s 30 grand price difference there. The building prices went from May to June, went up 2%. And the next release blocks, the titles were delayed or slightly further out than the previous release.

So the delayed title allowance was also a little bit higher than the previous block. So the difference between the two package, the two packages from the two different blocks, one around the corner in a different release and the. Other one that we got in the next release was 50, 000, 30, 000 from the block cost, the price difference between one release and the next release.

A few weeks, the price change with building went up 2 percent and the delayed title allowance changed. Now that is obviously quite a large example, the estate that I’m talking about, they, the price went up quite significantly. Usually it’s not that significant, but every release at the moment with blocks land is moving.

So it’s not something to just consider about building prices going up at the moment. You have to consider each release with blocks of land. They’re also getting more expensive at the moment. So the difference between these two packages was 50, 000 in three weeks. Now our clients still happy. They wanted that block.

They’re going ahead with the different package, but this is just to educate you on some of the things that. Can happen and can shift. And it is a perfect example of how time is money. You know, waited three weeks. We got a different block. We waited for the next release, et cetera, but the prices went up.

The titles delayed title allowance change because titles are due later and the price on the block on the next release went up and that they’re waiting. Then those couple of weeks now cost more for the exact same package. So you can see here how it is so important to understand right now. Time is money.

And the best time that you can work out when to get into the property market is when you can afford it. So you can spend time in the market. The longer you spend time out of market. Prices for land and build costs titles. It’s getting further and further to the other end. Whereas if you get in, so I’ve got like a couple of examples that I’ve been chatting with clients this week of clients who got into their homes, like moved in, in 2023 and earlier this year, I have three examples.

So one of my clients. She has a 398, 000 loan. She started the process in 2022, moved in in 2023, and she has 200 grand equity in her house. Now it’s currently just been valued. Another client moved in earlier this year and she has another 200 grand equity. She started the process back end of 2021, 2022. And another client who started last year with me and moved in this year, probably just a couple of months ago, um, she has 110 K equity in a house.

So you can say, obviously the price difference between one established and also building in the last 12 months, the median house price is continuing to go up over a number of factors, supply, demand, population, rental prices, stock, all those things that are driving the prices up. These clients have spent time in the market and they now have equity in their house.

So rather than them waiting and paying more in today’s market for their house, they got in when they could afford it. They haven’t been priced out of the market. All three of these clients are actually single females as well. And at the moment, servicing on a single income is really, really hard because interest rates are so high.

And that goes with when the interest rates go up, your borrowing capacity drops. So, you know, four years ago, you could service on a loan because interest rates were so low your income as a single income earner, you could service for a package for 50 to 500, 000. That also doesn’t get you anything in this market anymore, either.

These three ladies got in when they could afford it. They now, because they didn’t wait, they haven’t been priced out of the market because the interest rates have gone up and borrowing capacity has gone down. And they got in at a time when they could afford it. Their borrowing capacity, they were eligible.

They could afford a house and land package. And now they have between 100, 000 to 200, 000 equity in their house. And that’s the other side of it. Time is money. If you wait, you’re going to spend more money on the same. package. That’s the way the market’s moving. It’s the new normal. But if you get in, when you can afford it, rather than waiting, you will have equity in your house.

It’s like the Perth median house price grew 6. 1 percent in three months, which added about 45, 000 to the median house price, sitting at 763, 000. Now these stats and data is all from CoreLogic. Now you can see. The median house price is still continuing to go up. And it’s just a perfect example of how time is money and why it is so important.

Like if you’re on the fence, if you’re umming and ahhing, if you’re deciding between establish and new build, make a decision that’s right for you, make an effective and efficient decision. Don’t sit on the fence for too long. If you keep sitting on the fence, you’re going to pay another 50 grand. On established and on new build, you know, established is very hard at the moment too.

And the stock levels are dropping to a even lower than what they were before. Like they’re continuing to go down. As a construction industry, we can only build about 14, 000 homes a year. And we need about 30, 000 homes a year. So you can, the supply and demand, how many new homes can be built? They don’t add up.

So it’s going to continue to go like this. And drive prices up because their demand is high and the supply is low. So it gives you a little bit of an understanding on a few different examples. You know, clients that have gotten into the market when they could afford it. Now they have equity in their house a couple of examples on how Clients have weighted different blocks different releases their package was another fifty thousand dollars more Each release and it’s releases with land at the moment.

It’s tough, you know Land agents are releasing eight to 10 blocks every release and each release could change between five to 10 grand. We had another client who looked at a block in one estate and decided not to go with that one and wait for a release in the another estate. And that estate was way more expensive than what she thought and expected.

So she went to go back to the original estate that we looked at that obviously had sold out and we needed to wait for the next release. And then the next release, the block was another 10, 000 more. So it’s not just a matter of building prices going up anymore. The land prices are moving each release and it’s about making that effective and efficient decision and being proactive about it.

Do I want to get into the property market? How much can I borrow? How much savings do I have? What are our repayments going to be look like? Where do I want to live? And breaking down and understanding that to help you get into the property market to spend time in the market. You cannot time the market.

It’s all about getting your foot in the door. And especially if it’s your first time, it’s not the forever home, working out what works best for you in your situation, you have any questions or you want to have a chat about it, book a discovery call, um, and we can have a chat, go through it, have a look at a finance form and work out exactly how that looks for you.

if you can afford it and what an action plan looks like to get there. Thank you so much for tuning in to the Home Building Like a Boss podcast. I hope you enjoyed today’s episode and learned something new. Remember, you’ve got this and I’ve got your back. Until next time, stay inspired, stay informed and stay confident on your building journey.

I can’t wait to chat with you on the next episode. Don’t forget to check out the show notes for more information and feedback. If you haven’t already, hit that subscribe button, so you never miss an episode of the Home Building Like a Boss podcast.