With the latest 0.5% cut in interest rates, New Zealand buyers must start to think strategically about the best time to jump into the market.
Now the Reserve Bank of New Zealand has trimmed rate by a full 1% in the last few months, you have precious few moments to consider your strategy before prices start to edge higher. And that’s true for upgraders, downsizers, first-time buyers and investors.
After two years of market doldrums, we’re beginning to see values stablise, and this will surely progress to price growth in the next few months.
The rate cuts have given buyers access to cheaper loans, while sellers will welcome the increased liquidity as it enhances the likelihood they’ll achieve the price levels they believe their homes are worth.
A recent OneRoof survey found Kiwis are preparing for a rebound. Some 41% said affordability would improve over the next 12 months, and 21% said lower rates would influence their decision to transact.
For buyers and upgraders, the challenge is to find the right response to this moment.
Here are some ideas to consider your options.
- Buy Now: The national average price is down a further 1.1% to $957,000 for September, according to the OneRoof-Valocity House Value Index. It’s easy to be a bit gloomy if you’re a seller. But most will sell and buy. So if you’re an upgrader, lower prices mean cheaper buying. In the current scenario, you’re going to finish ahead even if you receive less than anticipated for your current property.
- Your Timing: Don’t fixate on trying to find the optimum time to sell and buy. Right now, conditions are in your favour. Even if you can’t make the timing work perfectly, you’ll find it easier to transact now rather than when momentum swings to the seller.
- Fix the Finances: Frustrated buyers number in their thousands in NZ. Now the rates have dropped and access to cash is easier, you’ll experience increased competition for properties. You’ll need to move quickly when you find your dream home. Have your financial arrangements finalised so you can act quickly.
- Preparation Focus: While seeking a new property, you’ll need to prepare your own for sale. It’s usually agreed that selling first and buying second is the safest option. But a turning market puts a question mark against that strategy. Your best move is to get your current property ready for sale and onto the market as quickly as possible.
- Find a Great Agent: Engage an agent as early as possible. And we’d be delighted to help. A great agent will guide you on your likely sales price, and offer advice on how to prepare your home for sale. We’ll highlight areas that command a premium with buyers, and caution against any improvements that might have no impact on value.
- Be Flexible: You should accommodate every prospective buyer as much as you can. Occasionally, they will want to inspect the property at the most inconvenient times. But you need to respond positively. Equally, few sales will proceed without a negotiation. Be open to making a deal, but have your bottom line decided in advance.