What is the best time to buy a house?
As real estate prices vary from one property to another and from one region to another, prices also differ according to seasonal periods, and sudden changes in supply and stock of houses. Furthermore, the prices might be affected by changes in government policies and the local economy’s status and the impact of global events in the rest of the world.
Therefore, choosing the right time to buy a house is an essential part of the purchasing process, because it plays a significant role in maximizing the buy options, enabling you to make the ideal deal that meets your personal requirements. The best time to buy a house:
Low-interest rate periods
The real estate market is closely related to the interest rate changes. Any action in the interest rate is directly reflected in property sales. The central bank is the primary responsible for setting the interest rate, which is approved by all banks in the country.
The central bank usually raises or reduces the interest rate according to the national economy’s requirements. When the economy suffers from a recession, expansionary monetary policies are followed by lowering the interest rate to revive the economy. In contrast, in the cases of high inflation, the central bank follows the austerity policy represented by raising the interest rate to control prices and achieve exchange rate stability.
The effect of the interest rate on the real estate market in both contractionary and expansionary monetary policy cases will be as follows:
when the interest rate is raised for some reason, this leads to an increase in the cost of the bank, including property loans. Therefore, the borrowing process will no longer be easy, which decreases the demand on the properties financed by banks, reflecting negatively on the entire real estate market.
Unlike, in the case of lowering the interest rate, the cost of borrowing decreases, which encourages more borrowing operations and more demand for buying properties. Therefore, the periods when the interest rate falls are the best for buying property.
Economic boom periods
The periods in which the country experiences an economic recovery also see prosperity in the real estate sector. When a country’s economic growth rate increases, most of the economic indicators improve, including the purchasing power of the local currency, the corporate profits, wage rates, as well as borrowing process, encouraging those who want to own houses to take more steps to buy.
The economic recovery also urges real estate construction companies to increase their supply by undertaking more real estate projects and providing more competitive opportunities.
Buying a house in spring and early summer
If you want to buy a particular house, getting the chance to have a wide range of options in your hands, the most suitable time for you is in spring and early summer seasons from March to July, as both demand and supply rise significantly in these five months. So if you want a house with unique specifications, you should take advantage of this period to search for your dreamed house.
Buying a house in winter
If you are interested in buying a house at a low price which suits your modest budget, we advise you to buy it in winter through those three months; November, December, and January, as real estate prices during this period declines significantly, due to the lack of demand on properties. However, in contrast, your options which left in your hands are also limited due to the low supply of houses in this period as well.
The periods of a large supply of houses
You can also take advantage of the opportunity to have a large supply of houses during the spring season, as the property market usually experiences higher supply this season.
Furthermore, following some laws or policies related to the real estate sector, such as reducing construction taxes or real estate taxes or even lower building materials, can significantly encourage construction companies to undertake more real estate projects.
Therefore, whenever those changes happen, you can get a unique chance to own a house at a reasonable price.
Finally, after considering all these unique times mentioned above for getting your right house, you should also choose the appropriate time when your financial situation is stable. For example, if you do not have accumulated bank loans and interest or have enough liquidity resulting from additional bonuses or a salary increase, you can afford the down payment.