Am I Paying Too Much For My Sydney Home?

Sydneysiders with an appetite for the property market may be waking up each day with the question, “are we paying above what we should for our Sydney properties?” in mind. It is a pertinent question and its answer involves a thorough analysis of what “paying above what we should” means. Time pockets come with their own financial barometers. What could be considered way over the mark 20 years ago will be thought of as meagre today. Why? Because, economies require constant inflation-adjustment to drive at any kind of comparison.

What makes the Sydney property boom possible?

Before thinking if we are paying enough for our Sydney properties today, we should also give more than a cursory glance towards what makes the Sydney boom possible. Yes, while there are external factors like low prevailing interest rates which have determined the present situation of growth at large, there is no dearth of intrinsic factors like demand-supply imbalance (supply being on the lower side) either.

The overall picture which emerges is of a city for which the beeline of buyers is getting bigger by the day. It only gets more voluminous if we add the line of expatriates/overseas buyers willing to take a plunge.

Mortgage premiums only to get higher

Vendor discounts have come down and so too have vacancy rates for rental accommodations. What am I driving at, and at a ferocious pace at that? I think we have to push our tethers. The mortgage premiums will only get higher in the coming days. While there is so much talk about how we cannot match pace with the phenomenal growth registered in the year 2013 and 2014, I think Sydney has got a second wind and RBA is considering stepping in if it passes a 15% growth rate in the year 2015 (before coming within reasonable bounds in 2016).

It is a good time to buy……yes, quite surely

At this moment, the plot is clear. If you want a closer look into the highly coveted Sydney property market, you will have to pay more and not be bothered about it. Each growth cycle takes its given number of victims but also offers quite a bounty to many. A Sydney home registered in these present times will give back a lot more through capital growth than what it takes because of a higher purchase price. Even here, low interest rates would relax the repayment structures just enough if you lock in now.