There’s a light at the end of the tunnel, or at least the first indication of one, in the latest January house price data.
Tapering values across New Zealand slowed by 1.2% in the three months to the end of January, according to the OneRoof-Valocity House Value Index.
After dipping 4.3% in the September quarter, the market is showing signs of turning the corner, losing 3.1%.
And, it is worth remembering that this is on the back of values that catapulted by double-digits in 2020 and 2021.
The current market has opened the door to upgraders. While they may have to settle for a lower price for their existing property, they’ll benefit from the market’s built-in discount.
If you take a 10% hit on your current $500,000 property, you will be ahead if you buy in the same market at $750,000 or even $1m. In short, you’ll get far more house for your money than at the height of the property boom.
The challenge for the average buyer is being prepared to take that journey when it means selling for less money.
With inflation flattening out at 7.3% and 7.2% for the past two quarters, global indicators suggest we have reached our peak. Our strong economy with growth in the September quarter and 3.3% unemployment means the current market sentiment will improve.
These tips may help if you are considering upgrading from your current home.
It’s your call
Moving home is a personal decision, and more significant factors than market opportunity should dictate it.
Time to move
Research suggests you need to be in a house for at least five years to ensure you don’t lose money on its sale. The cost of buying and selling adds up. So, unless you’ve renovated and are ready to flip, consider your bottom line.
Getting squeezed
Many homeowners move when their properties feel too small. For example, little kids become teenagers and want their own rooms, or you’re under pressure to accommodate an elderly family member. If it feels like the walls are closing in, it’s time to upgrade.
Better location
Location can play a big part in your decision. Whether you’re moving to a new job, want to cut down commute times or be closer to the kids’ new school, upgrading to improve your lifestyle is one of the best reasons to move.
Neighbourly success
Another big influence on upgrading is hearing how your neighbours got a great price. That’s no guarantee for you, but it should get you thinking about what’s possible.
Cut a deal
If you’re prepared to cut a realistic deal on your home, you’ll be in a great position to enjoy the benefits of a buyer’s market. You’ll find better opportunities than you would have done two years ago.