After 13 rate rises in less than two years it’s understandable that some people may be putting the brakes on any property purchasing plans. Forecasts of further rate rises are only adding fuel to their mental fire, analysts predicting another hike either next month or February 2024.

This group of people however are overlooking one of the most fundamentals of property buying: that what constitutes a wise purchase is the ability to make one, not so much the market conditions of the day.

Simon Rose, principal of Rose Buyers Agents says he is currently seeing many owners sell their properties but then opting to rent instead of buy when they easily could. Their justification? To wait “until the market settles down”. 

“This is contrary to reality,” Mr Rose says. “My advice to anyone is to buy and sell in the same market - because if you don’t, when the market changes as it inevitably does there’s a much higher chance of being forced to pay more for less – and essentially be lumped with a lower quality asset that puts you at very high risk of going backwards rather than forwards.”

The best time to buy, Mr Rose says, is “when you’re ready”. “No-one has a crystal ball,” he says. “It’s all speculation. High interest rates or not, a potential buyer just needs to be urged to get their finance pre-approved so that when they do see something that suits their needs, they can jump right in with nothing blocking their way. People also always forget that the average time frame for buying a property is four to six weeks.

Cycle never stops 

“The truth of the matter is that the more that buyers hold off due to a belief they need to ‘find a bargain’ or ‘value for money’ the less their chances of doing so become,” Mr Rose says. “In a market like the one we have right now where there’s low supply and high demand the idea is to simply secure a property in the first place. That’s something that we as buyer’s agents must be impressing upon our clients right now.”

When economic headwinds headline news bulletins it’s easy for anyone who’s not in the business of selling real estate to forget that property prices are cyclical. That’s why clients and buyers need to be reminded that it’s only a matter of time before values head north once more, Mr Rose says.

“The trouble is that a lot of people are waiting for the bottom of the market,” he says. “But it’s impossible to know when this occurs. Then, before anyone realises, we’ve gone through the bottom of the market and it’s on the way back up. I often see people kicking themselves for missing that period of time when prices were what they will in the future look back at and see as reasonable.”

Answering the biggest question 

So, what to do when a client presents interest rates as their biggest obstacle to buying? The ultimate answer is to point to long-term gain, Mr Rose says. “Even if they end up paying a couple of percentage points extra on their mortgage, they certainly won’t be thinking about that in 10 years from now,” Mr Rose says. “We need to be reminding people that it’s when they try to flip property that they must be careful. 
“But if they go down the path of a seven to 10 year-hold or more, then a couple of percentage points is negligible in light of the capital gain they will make – regardless of higher interest rates.”