When is the Best Time to Build or Buy? The Answer No One Wants to Hear

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Let’s get into it. Thank you so much for tuning in to another episode. Today we’re going to chat about the million dollar question, which is when is the best time to build or buy a home? Now this is a tough question to answer, and it’s not really as straightforward as what you think it is. A lot of people think it’s pretty straightforward, but it certainly is not.

I get asked all the time, when is the best time to build or buy? Or clients and people say, I’m going to wait until interest rates drop. I’m going to wait until the market changes. I’m going to wait until prices drop. I’m going to wait until the building market comes, comes down. And reality is, you cannot time the market.

Now what do I mean by this? You cannot time the market with the way it’s going to get into it. There is never a best time to build or buy. The valuable thing here is time in the market. Now what do I mean by this? This is a long term game. Getting into your house. What is valuable is how much time you spend.

in the market. We don’t have a crystal ball. You cannot time the market. You can’t check the crystal ball and be like, Oh, in two months, the market’s going to drop. I’ll get in then. It doesn’t happen like that. Reality is we’ve got absolutely no idea. So. You need to work out, when can I afford to get into the market, and is it right for me?

The answer to that question is, can I afford it, and is it the right time for me? If you can afford it, you’ve got your savings, you’ve got a job, you’ve got income, and you can get into the market, you’re eligible for a house and land package, or to buy established if you go that option, that you can do it.

Can you afford it? Is it the right time for you? And this here will set you up and get you in to get you time in the market. You cannot time the market working that out. It’s going to be impossible. With this, I have a client last year who, she picked up her keys in December. She started the process with me mid 2021, if she picked up her keys last year, yep, mid 2021.

And she had a house and land package in Byford, which was 380, 000. She used Keystart to get into the market, which is a low deposit option. Even Keystart has a low. deposit to help get you in. The trade off is the interest rate is a little bit higher. So at the moment I think the key start interest rate is about eight percent, so it is quite high, um, which makes it a little bit tougher to use in today’s market.

Now she built 380k package in Byford, a three by two on a ten and a half by thirty block, so 315 square meters. for 380k. Now when she got her keys in December last year, she picked up her keys and got it valued straight away because she wanted to get off Keystart. She wanted to see what the value of the home was to refinance off Keystart.

Keystart isn’t a tool to You’re not supposed to stay on it long term, it’s here to help you get into the market at a low deposit and eventually refinance off it once you have built your equity or you’ve got enough value in the home. Now she got it valued. She still didn’t have any landscaping done, I’d add.

No aircon added in. It was pretty basic key start finish home to get into the market. And the property was now valued at 455, 000. So she went from 380, what she, her house and land package, now to 455, 000. Now she used this to then get off Keystar and refinance onto a bank loan, which now means her interest rate is lower than what it was on Keystar.

The point of this is, that was only her, her time in the market was her building process. Her pre construction, roughly five to six months, and then… building, which was under 12 months, just that amount of time, her home increased in value by that much. So the point to this is time in the market. If she didn’t get into the market when she did using Keystart as a low deposit option, she wouldn’t be able to get into it in today’s market.

The ball and the game has changed totally. If she had waited to time the market, rather than working out What can I afford? Can I do it? And is it the right time for me? She wouldn’t have gotten into the market. So you need to work out, 1. Can I afford it? Do I have savings? What do I need to do to get there?

Is it even possible right now? Or, is it not possible right now? Do I… need to change jobs? Do I need to save more money? You need to work out and if you can afford it, is at the right time and get into the market. If you sit on it and you wait and you’re trying to time the market, I’m going to save a little bit more money, I’m going to wait until interest rates drop, you are going to get outpriced.

And what I mean by this is You might have, let’s say, you’ve got 20 grand saved up, and you want to save an extra 10 grand. And you came to me, let’s say, 6 months ago, and now you’re coming today. You’re like, I’ve saved the extra 10 grand, can I, can we look at that 500k house and land package that we looked at?

Unfortunately, the answer’s gonna be no. The market is changing so fast that your budget and your borrowing capacity has dropped from the bank because interest rates have increased. So when interest rates increase, your borrowing capacity drops. So, in saving that 10, 000 extra deposit, You’ve actually lost borrowing capacity from the bank so your budget now for your house and land package is way less than what it was before.

So now to answer and recap on the million dollar question, when is the best time to build or buy? You will find the answer in this, if you can afford it. Can I afford it now? And if so, That’s your answer on when is the best time to build or buy a home. If you are feeling a little bit unsure or you’re not, If you’re not certain if you can afford it or what you can afford, please reach out to me on Instagram via DM.

I can, we can have a bit of a chat and I can do a free finance health care check for you through my mortgage broker that I work with. And from that, I’ll be able to give you a super accurate plan on can you afford it now or what is your action plan to get there? And look, you might not be able to afford it right now and that’s okay.

What’s the action plan and the steps that you need to get there in three, six, 12 months. And that way it gives you the right tools and information for you to make a decision on when is the best time to build or buy for you. 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. and free resources. If you haven’t already, hit that subscribe button so you never miss an episode of the Home Building Like a Boss podcast.