New Zealand’s residential property market is going absolutely bonkers. More properties were sold in Auckland during September than during the same month in the last 4 years. Plus national median property prices are up by almost 15 per cent, according to the REINZ.
Considering the crazy year we’ve had and the way the property market is bubbling over, you may be wondering: is now a good time to buy property in New Zealand? Well, it depends.
New Zealand property: To buy or not to buy
Over the last 6 months, we’ve seen buyers rush into purchases and make mistakes. With all the urgency and competition that comes with a hot property market, it’s easy to lose your head.
Don’t get sucked in. You should only buy right now if it’s the right choice for you and if you’re ready financially and personally. Isa Nacewa, adviser at Money Empire, says the pressure is huge, but you should always sort yourself out first:
“You’ll always get pressure from real estate agents and other parties involved but just make sure you control your situation and finances and put your best foot forward. You can’t control the market or what other people are doing – all you can control is your own situation.”
When buying property this means:
- Getting finance pre-approval before you start property hunting.
- Making sure you can afford mortgage repayments, rates, maintenance, insurance and other expenses before you buy.
- Doing your due diligence on the property including looking at the LIM and getting a builders report.
- Getting to know the area you’re buying in.
- Making 100% sure you want the property and will be happy to live in it for at least 3 years (for first home buyers especially).
Buying a property and securing a mortgage is a big responsibility. Get the right advice and think it through before you make any decisions to make sure you’re making the right ones.
Reasons why now is a good time to buy property
If you’re 100% certain that you’re ready and you’ve got a mortgage broker and a lawyer lined up to help you, now could be a great time to buy property in New Zealand. Here’s why:
Interest rates are low and (probably) going lower
The Reserve Bank has told banks to prepare for the possibility that they may drop the official Official Cash rate to 0% in the near future. That means already low interest rates could go even lower, reducing the cost of owning a home.
Prices are going up
Despite a global pandemic and recession, house prices in New Zealand are still going up. In fact, median property prices increased in every region in NZ during the year ending September 2020, according to the REINZ.
More Kiwis are coming home
More than 50,000 Kiwis have returned home in 2020 and according to a recent survey by KEA, a further 500,000 could be on their way in the next few years. This could create more demand and bolster the market.
For these reasons and more, now could be a great time to buy property in NZ – but only if you’re ready! Before property hunting, always get financial advice from an impartial expert that you can trust and get home loan pre-approval so that you’re ready to go when you find the right place.
Get in touch with the team here at Money Empire to get started!