Australian property prices have seen very strong growth numbers over the past 18 months, with most regions seeing double-digit returns, and with supply levels remaining quite low, expectations are that this level of activity may continue for some time yet. While the expectations are not for double-digit growth over the next 12 months, analysts are still expecting that many of the major capital cities across Australia will see strong growth.

This, therefore, raises the question for those looking to enter the market of how can you ensure you buy smart while the market is rising. This week our team at Loansuite explores our top tips for making smart buying decisions during a rising property market.

  1. Know your maximum borrowing capacity

It’s important to explore exactly what your upper limit is with your mortgage broker so that you can avoid over-spending on the property. Your mortgage broker can work with you and the lender to determine your maximum possible borrowing capacity so that you know exactly what your upper limit is.

  1. Know your monthly loan repayment figures

Interest rates are currently at record low levels, with many owner-occupiers paying a rate starting with a 1 or 2, and most investors paying a rate starting with a 2 or 3. This is causing many borrowers to over-leverage based on these current low repayments, without giving much thought to what these figures could look like in the future when interest rates start to rise.

It’s important to create a quick spreadsheet or note that you can refer to outlining the monthly repayments on the amount you’re looking to spend, the maximum amount you’d be willing to spend, and what these figures will look like when interest rates are 2 – 3% higher. This gives you a handy cheat sheet if you’re attending auctions or browsing properties online or with your buyer’s agent.

  1. Be aware of all of the costs

Most should be aware that there are a number of costs associated with buying a property, some of which can increase with a higher property price. Make sure that you’re aware of what the costs, such as stamp duty would be if you increase the amount that you spend on the property, and you aren’t faced with any nasty surprises when it comes to settlement.

  1. Be prepared to walk away from some opportunities

When the market is ‘hot’ and there are more prospective buyers than sellers, then this can result in some people paying well above the asking price, whether it be through an auction or private sale. This can particularly be the case for owner-occupiers looking to buy their own home, as this then becomes a much more emotionally charged decision. Ensure that you’re prepared to walk away from some opportunities if the price gets too high or outside of your comfort zone.

  1. Consider expanding your search criteria

You may be looking in only one suburb and finding that the prices are rising too quickly, but perhaps it’s time to expand your search. You may consider checking out suburbs one or two away from the area that you’re currently looking in. You may just find some great opportunities that are still very close to the area that you’re looking to buy. You may also want to consider adjusting some of your other search criteria such as the land size, fixtures, and fittings, pool and gardens, or other aspects that may not be that important to you.

  1. Ensure that you have your pre-approval in place

When the market is ‘hot’, it is certainly a seller’s market, and this means that many vendors can be less willing to accept a finance clause, allowing you to walk away from the contract if your finance application is rejected. By working with an experienced mortgage broker, you can ensure that you have your fully-assessed mortgage pre-approval in place and comfortably make an offer on the property that suits you.

If you have any questions about buying in the current market, or just want to get your pre-approval in place so that you can start exploring your options, reach out to our team for an obligation-free discussion.


LoanSuite Pty Ltd is your lending partner for all of your home loan, investment property, business, and commercial financing needs. With our wide range of lending solutions, expertise in financial planning and investment strategies, and extensive experience in working with both Australian residents and Australian expats, we are your partners for your lending needs.

Book an obligation-free, complimentary consultation here today.

LoanSuite Pty Ltd is an Authorised Credit Representative (Credit Representative Number – 494608) of My Local Broker (Australian Credit License – 481374). Important Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.