I noticed a story in The Australian about people in Australia being worried about paying too much for the property, but unfortunately it was hidden behind a paywall.
It’s a bit of a shame really. I research internationally and with a blog that generates no income, I can’t afford to be paying for articles from papers all over the world. If you haven’t been to their site before you can find the article here. Of course not having been able to read it, I can’t tell you if it is a good story or not.
So in the absence of the article, there are a couple of things I’d consider in this space:
Firstly, if you are buying and selling in the same market, most Real Estate Agents will tell you it doesn’t matter too much. It also depends where you are buying. I shared a story a couple of days ago about bargain properties in Perth. Doesn’t help if you want to stay in Sydney or Newcastle which seems to be almost as expensive as Auckland in the premium areas.
Other things to consider areyour current financial circumstances, if a property ticks every square in the box, whether the vendor is in a hurry to make a sale and most of all, how long you intend or hope to stay in the house. If you are going to stay there for at least 10 years (I know, unexpected stuff happens), chances are the property will double in value as this is a pretty consistent average.
It is just so important to do your homework on your chosen area. Check out the suburb, the city or town, the school zones, whether it is a popular growth area, what the public transport is like, growth in job opportunities, all those things and maybe the fact that prices have gone up is not an issue.
The other thing is prices may not have peaked and you might still be getting good value and ultimately, as I said above, if you love the property and it ticks all the boxes, the property’s value is what you think it’s worth.
Having said that. I would be going on the basis of Pareto in that market 80:20 facts and stats versus emotion, which is how we recommend you buy a house.