Experts weigh in on whether it's a good or bad time to buy a house in regional Australia

Simon Humphrys and Rebecca Halsted have chosen to rent long-term rather than buy a house given Canberra's rising house prices. Picture: Dion Georgopoulos
Simon Humphrys and Rebecca Halsted have chosen to rent long-term rather than buy a house given Canberra's rising house prices. Picture: Dion Georgopoulos

As house prices continue to rise across regional Australia, hopeful buyers aren't alone in questioning whether now is really the right time to get into the market.

For Rebecca Halsted and Simon Humphrys, who moved to the ACT from South Australia three years ago, Canberra's soaring prices turned them away from purchasing.

"There's no way we're prepared to [pay] $1.5 million to $2 million for something that still needs renovation. We'd rather rent full-time with that money, invest it elsewhere and live in the area that we want to be in," Ms Halsted said.

The median price for a house in Canberra is now $956,119, up 28 per cent on last year's CoreLogic report figures.

Ms Halsted has more than just a personal interest in renting as an alternative to buying. She operates rental search business IView Rentals and said many of her clients were choosing to put off buying in the ACT.

"They'll often have homes in other states but they're not willing to put their money into the Canberra market. It's just ridiculous," she said.

They're not alone in believing now was not a good time to buy. A survey by comparison website Finder revealed just 35 per cent of Australians believed now was a good time to purchase, compared to 67 per cent in December 2020.

Scott Malcolm, financial planner and owner of Money Mechanics, said his advice to clients was "try not to get too caught up in the pressures of the system".

"We're born into the financial system and then we have these ongoing drivers to buy a house, have a mortgage, all those sorts of things. That's right for some people but it's not right for everybody," he said.

Economist Saul Eslake warned buyers against making decisions "just for FOMO, for fear of missing out".

"Living in a house or in an area that you don't really like just because you felt you were going to miss out if you didn't [buy it] is not the right way to live your life," he said.

What other options are out there?

Rebecca Halsted and Simon Humphrys have chosen to rent long-term rather than buy a house given Canberra's rising house prices. Picture: Dion Georgopoulos

Rebecca Halsted and Simon Humphrys have chosen to rent long-term rather than buy a house given Canberra's rising house prices. Picture: Dion Georgopoulos

Mr Malcolm said 'rentvesting' had become a popular alternative, where people rented in their ideal suburb and bought an investment property in a more affordable area.

"Rentvesting is actually working really well for a lot of people because you can rent the dream house or the house that ticks enough of the boxes for you and still be saving money because if you were paying the mortgage on that property, it's actually less to potentially rent it," he said.

Mr Eslake said the share market might be an alternative for some buyers to consider.

"The share market is much more volatile than the property market. For the east coast capitals, the property market has been better over the last 25 years than the share market but past performance is no guarantee of future returns and I'd argue that precisely because property has gone up faster than shares over the last 20 years, that's probably not going to happen over the next 20," he said.

"So shares are an alternative, but you need to get good advice as to what shares to buy and when to buy."

Mr Eslake said depending on income and employer contributions, voluntary super contributions might also be an option for some people "in the knowledge that you can't get it out again until later".

Is there really a good or bad time to buy?

If the ultimate goal was to own a home, Mr Malcolm said the right time to buy was when you were ready.

"Run your numbers, make sure you can afford mortgage repayments - not just at the current rates today but also if interest rates go up. Do your numbers as though interest rates were 2 or 3 per cent higher than they are today, just to make sure life is still comfortable," he said.

For buyers looking for a investment property, Mr Eslake said "the best time has almost certainly passed" but if it was a forever home you were searching for, market conditions shouldn't entirely dictate your decision.

"If you find the home that you can sense is really going to be yours and you can afford to buy it, then now is the right time to buy it," he said.

"I would still say that even if I thought that prices were going to fall a bit because if it is the home you really want, you can see yourself living there for 10, 15 years or so, even if it does drop in the near term, you'll probably make it up again."

This story 'Don't buy for FOMO': Is it the right time to buy a home? first appeared on Newcastle Herald.