Upgrading your property, or plunging into the market for the first time, requires some strategic thinking at the moment.
Shelving your property ambitions right now, and putting them to the back of your mind, will not help you capitalise on the current opportunities.
While New Zealand is technically in a recession (we’ve had consecutive quarters of negative growth, albeit 0.7% and 0.1%), we believe this is the wrong time to shrink into your shell.
Why? This recession is pandemic-made, powered by rising prices due to many factors, including supply chain and employment issues that put many goods and services in short supply.
That created inflation, and the Reserve Bank of NZ responded as all central banks do, ramping rates and cooling the economy to crush inflation.
During this process, we’ve seen real estate prices taper down, resulting in many owners deciding not to sell and reducing the number of homes for sale.
We’ve also witnessed strong employment numbers in New Zealand. If workers are confident about their job situation, they’re equally optimistic about their ability to buy property.
These factors are likely to lead us to a full-scale market recovery. And when it arrives, watch out. Sentiment can change overnight, and prices will likely increase before most buyers can react.
These suggestions will help you respond quickly when you find the next home of your dreams.
Determine your budget
Nothing is more important. Consider factors such as your income, savings, monthly expenses and the interest rate on a suitable loan.
Keep saving
Having a downpayment or collateral doesn’t mean you should stop trying to save. The more cash you have, the less debt you’ll carry or the more you can afford to borrow.
Loan deals
Continue to monitor the best loan deals. The most suitable are not always the cheapest. Most importantly, get pre-approval before starting your home-hunt. Don’t find the perfect home and then rush a pre-approved loan. That’s when costly mistakes are made.
The wishlist
Make your property search efficient by listing your must-have and nice-to-have features. This way, you’ll rule out properties that don’t meet your criteria.
Keep researching
Talk to agents about the market and monitor price trends. Ideally, you want to beat the rebound.