Luxury Outlook 2023
An ambitious exploration into high-end residential markets across the globe.
We tend to track forward momentum in life by a few key milestones—first job, first car, first home—but in reality, there are no one-size-fits all markers of success. Existence can be far more exciting when we opt to follow our own timelines. That said, purchasing real estate, whether for you, your family, or as an additional source of income, can be a point of pride and something to celebrate. If you’re keen, you may be deliberating over one specific question: when is the right time to buy your first property? Here are a few indicators that you’re ready to take the leap.
First-time buyers are often surprised by the additional appraisal and inspection costs that can come with a home, not to mention repairs or renovations. From land transfer taxes to closing costs, home buyers should anticipate outlays beyond the property’s listed price. Ensure that you have enough on hand to cover the fees on your fantastic new space.
“My top tip to any first-time buyer is to speak with a number of lenders early in the process to determine their potential loan eligibility,” says Russ Lyon Sotheby’s International Realty sales associate Camden Steele. “The process of first-time home ownership unfolds opportunities for financial literacy on a much grander scale. Clients tend to learn more about credit, budgeting, investment, and insurance than they ever expected, and it can put them on the path toward financial freedom, independence, and wealth-building.”
The real estate industry is cyclical: over time, prices rise and fall. Have patience when entering the market, and purchase at a time that is favourable to buyers. Even if you’re looking to buy a property as an asset as opposed to a home, you’ll still get the best return on your investment if you can purchase during a market lull—and can wait to divest until a later high.
And as Millennials eschew the buying habits of their predecessors, the playing field for home buyers has expanded. “There’s been a cultural shift in behaviors towards experiences over assets or ownership,” says Steele.“I like to note that buying is often no more expensive or can even be cheaper than renting.” While it’s important to pay attention to the real estate market, don’t let the lower buying trends scare you off—depending on the locale, your first home can protect you from rental volatility.
Dubai, United Arab Emirates | Gulf Sotheby’s International Realty
Have high standards and a clear idea of what you want—but don’t be lured into overpaying once you find it. Similarly, waiting and waiting for the perfect fixer-upper opportunity can be a poor approach when you don’t actually have the renovation savvy to turn it into your dream home. First-time buyers have a tendency to get so excited about the prospect of purchasing that they overpay during negotiations. Go in with a clear head and keep your cool.
Your dream home should be a reflection of who you are, while also taking your lifestyle to the next level. Are you shoving the best pieces of your wardrobe into tiny hallway closets? Is it time to move to a livelier neighborhood or put down roots near friends? Are you crowding guests onto tiny balconies, and would you give anything to have a second bathroom? It’s important to clarify your expectations and howyou want to live: the right house near the right amenities can greatly enhance your quality of life.
“My number one insight would be an obvious one: location,” says Chile Sotheby’s International Realty manager Yolanda Tejeda de Walker. “When purchasing a first home, clients should define their priorities in terms of location. Is it more important to be near work? Do you have a family or are you thinking of starting one soon—in this case, proximity to schools might be a priority. Do you love to walk out and have shops, parks, and restaurants nearby, or do you prefer a larger home and plot of land?”
Buy when everything aligns: the numbers make sense, the area is a draw, and the property meets your personal goals.
Potential buyers are just that: potential buyers. If you’re serious about purchasing, take steps to make it happen. Know what local rates and prices look like, study the rental market, research bylaws and board rules. Leveraging your intel at the time of purchase will help you feel confident during negotiations and eliminate the risks of hasty or hesitant decision-making.
Nobody knows the market better than a seasoned real estate professional. “The reward of working with first-time home buyers is immeasurable,” says Steele. “In fact, the joy and pleasure in finding someone their first home, walking them through the process, and guiding them toward and beyond their initial fears is simply the best.” Partner with a professional who understands how your goals and concerns may differ from those of other clients, so when you do buy, you’ll know it’s the right fit.
With one of the biggest intergenerational transfers of wealth in history on the horizon, there will be more potential for smart luxury purchases than ever before. Whether you’re among the next set of live-in home buyers or looking to pick up the perfect penthouse for some lucky tenants, purchasing a first property is sure to put you in solid standing for future success.