As interest rates soar, high quality custom homes should be top of buyer’s list

 In News

Homeowners around Australia breathed a collective sigh of relief when the Reserve Bank of Australia (RBA) decided to put a pause on rates earlier this month, for only the second time since May 2022. The relief is unlikely to last for long, with speculation that more interest rate increases are to come.

Rolling interest rate rises have been hitting the back pockets of many homeowners since the cash rate first started climbing during the pandemic.

The hikes have left many making serious decisions about their home, whether they can continue to afford their mortgage and whether the property they purchased was worth it.

With more interest rate hikes on the horizon, it’s important for those looking to enter the property market not to feel deterred. Now is the time to make smart decisions about the type of home you want to own.

In the heart of Geelong, the average house price sits at $900,000, but many of the adverts for these houses boast terms like “classic” or “freshly updated”, indicating recent renovations of otherwise aged buildings. When you look at the analytics of surrounding suburbs, it’s a similar story.

Investing in bricks and mortar isn’t the same as it once was. The influx of volume homes means that builds done only 10 to 20 years ago are nearing the end of their lifecycle. Investing in something that’s worth significantly more than your outlay means you have to invest in quality now. The byproduct is that you’re also investing in how you live.

Potential buyers should be looking at the quality of the home rather than the price tag. The commitment to investing a significant amount of money into property should be matched with a commitment to a high-quality, custom build that requires no renovations and minimal maintenance.

It’s vital for buyers to look at spending that little bit more – without breaking the bank. If hard-earned cash is going to be spent on purchasing a home, it should be a home that residents can put their faith in. It should be a home that will remain standing strong for decades to come. It should be a home that is custom designed for your lifestyle, be it a family home or a retirement paradise.

There’s a big argument for investing in a custom build rather than waiting to find your dream property already existing and up for sale. It comes down to supply and demand.

There are tens of thousands of buyers in the market within the Greater Geelong region and not enough properties available. In Highton, there were more than 4,100 buyers interested in the past month but there were only 66 houses available for sale.

It’s a narrative we’ve heard right across Australia over the past few years and it is a clear indication of a market with not enough product for sale.

Compounding this for buyers is the fear of deciding to create your dream home, only to be bound by blown-out budgets and timelines, often exacerbated by supply chain issues.

It’s true that these issues, sparked by COVID-19 border restrictions, have left many local builders making the difficult decision to pull up stumps. It also makes buying a pre-existing house, or continuing to rent, seem like the easy option.

The difference comes when you finally receive the keys to a place you built. When you first unlock your new front door, you open it to a home that is suited to your unique, personal taste.

However, you never need to be too far from your budget. Value managing the design process from start to finish is the key to creating an enjoyable, and ultimately, more effective design journey – giving you the best home you can afford.

The key to feeling confident in building a new home is to think about the long-term goal. If you choose a custom build, you will be left with a home you can proudly call yours by design and by rights.

While it might be a daunting time to enter the market, interest rates will eventually stabilise.

In his most recent speech, Reserve Bank Governor Philip Lowe revealed the RBA will only meet eight times a year instead of 11, essentially removing the potential for an extra three interest rate rises a year.

Unfortunately for many, the Governor did not rule out further increases to the cash rate this year.

This is why now, more than ever, it’s important to invest in a high-end, high-quality home; a home which will last you a lifetime.

Peter Derbyshire
Managing Director, Derbyshire

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