So are you still considering purchasing your first home? Not sure if you want to make the leap?
The constant, ongoing increase in property values around the country may place you in a rather awkward position down the track.
For instance, if the property you are looking at is worth $700,000 today, if that property was to increase 5% over the next year, the same property will be worth around $735,000. Did you manage to save $35,000 or more during the year?
This is what we loosely call, the ‘price of procrastination’.
We will explore this in greater detail in this lesson.
Did you know?
Bubble wrap was originally invented as wallpaper.
If you can’t wait to pop every air-filled pocket the minute you pull a piece of bubble wrap out of a package, can you imagine how irresistible it would be if it were covering your walls? Engineer Al Fielding and Swiss inventor Marc Chavannes probably didn’t consider that when, in 1957, they invented bubble wrap while trying to create a textured wallpaper by sealing two shower curtains together to trap air bubbles.
Prefer reading? Here is a transcript of the video:
Hello, Paul Pappas here from Mortgage Choice. I want to talk about something that, to me, is very important, and it’s a conversation that, in fact, a lot of clients don’t want to have and don’t want to listen to, but I do feel it’s very important.
So, what it’s about is this, and that is the cost of waiting? The cost of doing nothing or what I more bluntly call the cost of procrastination. In other words, you’ve given some serious thought to buying property, but you decide not to do it. Now you decide to do it later for whatever reason, and commonly it’s because you could be scared you could not quite be ready for it. Very commonly, it’s because of what the media is saying about values of property, and that is that they could be correcting or coming down in a year or two. And you feel that you might be buying better at that point in time.
Well, my experience is this with many, many clients, and that is this, and that is that the value of the property increases at a much faster rate than what they save. So, in other words, the value of the property, the future value of the property increases more than what you can save, and what I mean by this is this, and that is if you’re saving I don’t know $2,000, $3,000 or $5,000 a month, $60,000 per annum. The value of the property that you’re looking at purchasing increases by more than $60,000 per annum.
So, let’s go through some examples of what I’ve seen over the years and my clients in some cases very much regret not doing things earlier, and some very common situations of this and that is that my clients are looking at purchasing a two-bedroom unit in a city location Eastern suburbs in the west lower north shore. Now at the time, it might have been six, seven, eight hundred thousand dollars in today’s market that unit is well over $1,000,000, so that value that unit has gone up by two, three, four hundred thousand dollars over the years.
Now that could be two, three, four, five years, depending on how long the person has waited. One thing’s for sure is that my client has not saved that money in that period of time. So, in fact, what they’re doing is this, and that is they’re paying more for the same product, same property. I should say, or they’re buying a lesser property because that’s all they can afford. So, it’s loosely called the cost of procrastination, so my view is this and that is once you make the decision to purchase property and you have the ability to do so. In other words, you’ve got a steady job, you’ve got a good deposit, and you believe that you do longer-term want to get in the property market. Then do it now, don’t wait because it will cost you more at the end of the day.
The value of the property will cost you more than what you can save, and I’ve seen so many situations of it that, in some ways, it frustrates me because people don’t commit themselves to actually doing it, and it ends up costing them all.
Please talk to us about your own situation. Let us help you get into the market sooner rather than later so that you don’t have so that you can avoid paying more than what you should for the valuable asset of property that you want to purchase as your primary place of residence. We’re here to help you, and chances are you can buy a property today without having to wait and then pay more. Thank you for attending!
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