February 21, 2023

Is it a good time to buy now?

The answer depends on what you’re looking for. If you buy to speculate, buy-to-let mortgages, costs, return on investment and market conditions come into play. Since most of you are buying a home to live in yourself, we’ll not go into that any further.

So the question should actually be: Is it a good time to buy a home to live in now? There’s again unfortunately no straight answer to that. Why? Because there are 3 things to consider in your personal situation to answer this question.

1. What does your current residential situation look like?

What are you paying for rent and what kind of residence do you currently have? If your rent is relatively low and you have a great place to live in, in a great location, buying a home might downgrade your living standard due to a reduction in size, different location and maybe quality of a home. If your rent is high and you believe you can get a better deal if you purchase and actually save money versus flushing money, then it might be the right thing to do.

2. What does your financial situation look like?

Do you have savings to pay for the purchase costs? Do you have consistent recurring income? And do you have a secure job or a long term employment contract? These things matter for there are costs involved to purchase a home and your mortgage will be a 30 year loan.

3. What are you plans for the future? How long do you plan on staying in your home?

If you’re here just for a few years you could consider buying, but deciding what to do with your newly bought home once you leave can be a bit tricky. Letting your property means you need permission from your bank which is not always a given. If the bank does not offer you permission, you could switch your mortgage to a buy-to-let mortgage, however the increased interest rates and lack of tax benefits might make this less appealing. We have made a specific video about letting your home that you can click on at the top. If you decide not to let your home you might have to sell it, which could be great if the market goes up, but could also mean that you wouldn’t get your initial investment back if it does not.

In the current market prices seem to still be going up slightly. But the uncertainty of COVID-19 makes past results no guarantee for the future. You can find my 2 cents on whether and how the Market will be impacted by COVID-19 in the link on top.

To make the answer a bit more satisfying I’ll break it down in two scenarios for you. You can then figure out in which scenario you’re in.

Number 1: It’s a great time to buy if you:

Have high rent, guaranteed income and if you are considering to stay in NL for 5+ years

Number 2: You might want to think some more about buying if you

Have low rent or a great value for money residence, no consistent income and if you’re thinking of leaving the country in a few years.

Which one are you in?