Residex’s John Edwards warns against overpaying in current market

Residex’s John Edwards warns against overpaying in current market
Residex’s John Edwards warns against overpaying in current market

With interest rates low and property prices high, particularly in Sydney and Melbourne, Residex’s John Edwards has warned property purchasers to be diligent about overpaying.

He noted that while interest rate increases will only cause problems to a limited extent for investors, due to tax deductibility of the interest, home buyers will be impacted more.

“Will there be people who are going to get into trouble as a consequence of the current high house price growth cycle and the low interest rates?

“Yes, there are always people who over leverage and have changes in personal circumstance which cause issues,” he said.

He said it’s crucial to recognise that house price growth is, indeed, slowing.

“It is easy to overpay for a property at this point in time, and over payment will not be covered by increasing property values over the balance of this growth cycle,” he said.

His word of warning to those tempted to stretch to borrow more than they can justify to themselves is simple. Don’t.

“This is not the time to do that. Buy a lower cost investment property and avoid the stress,” he said.

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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