Why the right time to buy is always when you can afford to

According to the expert, it’s important not to accept property growth predictions at face value, instead investors are advised to focus on the medium to long term when crunching those all-important numbers – from price growth predictions to personal financials.

“Don’t look at the immediate trend and say yes it will go up 23 per cent. Each property that you buy you need to look at it from a viewpoint of what will it do for me, and look at the worst-case scenario, let’s say the 20 per cent increase does not come into play and that’s the whole reason you bought into it. Maybe that’s not the right choice,” said Mr Kumar.

“However, you need to be looking at it from a viewpoint of when’s the best time to invest? Probably 10 years ago. When’s the next best time? When you can afford to,” Mr Kumar opined.

Stressing that “immediate wins” should not form the basis of an investment strategy, Mr Kumar’s business partner, Steve Waters, explained that affordability may currently be at its best.

“If you’re on the edge of not being able to perform it today, then don’t do it because it’s not going to get any better in terms of affordability,” Mr Waters said.

Delving into the issues around affordability further, Mr Waters reminded that there are two types of affordability – “one is what the bank tells you can afford and one that you know that you can afford, and sometimes they are wildly different”.

The conclusion, our experts believe, is that “you've got to be true to yourself”.

For more information about how to determine your own affordability limits, tune in to our podcast here.