Ask Paul: Should I buy a house now or keep waiting?
Hi Paul, I know you don't have a crystal ball.
But based on your expertise and unmatched financial wisdom, can you please let me know is this a good time to buy a standalone property in Melbourne middle ring suburbs?
Or should I wait till March 2021 when the mortgage holiday ends? - Sam
That made me laugh Sam. I had a flashback of my only property purchase in Victoria, where in about 1982 with a bunch of mates, we bought a $21,000 property in the Victorian alps, selling it for $11,000 five years later.
So much for financial wisdom! I can only say that it seemed like a good idea at the time and it led to one of my investment rules "never make investment decisions while at a pub with mates".
In your case though, I feel much safer. Buying close to any growing, major city is unlikely to be a poor decision. Despite the incredibly unusual situation, the key point is that our population is still growing, as is the world population. In fact, globally, we will grow by some 90 million people this year.
Moving local, Melbourne is expected to reach a bit over eight million people in around 30 years.
In your shoes, if I had the capacity to fund a property without a ridiculous level of debt, plus reasonable job security, I would do my research and if a well-located property came up at a reasonable price I would buy it.
I think it is fair to say that interest rates will be low for a long time, and while this COVID-19 situation is incredibly difficult for so many, we will learn to manage and live with it. Presumably, a vaccine that is at least partially effective, like a flu shot will also be with us in the not too distant future.
I am an optimist and so I believe in recovery. Add this to a growing population and I would argue a property as you describe, should do perfectly well over the long term.