If you have a crystal ball or a money tree now would be the time to get it out. You would also become pretty popular as analysts, economists and face book investor groups all lay out a prediction of the property market for the next 12 months.
There are many attention grabbing headlines of ‘economists and real estate agents predicting a drop in prices and sales’, well that’s not really rocket science but let’s look on the positive side shall we.
There are still houses being sold and loan applications approved. In fact in the Nest office this week we had an interest rate of 2.89% offered, that’s something to be happy about.
Many banks have put applications from new to bank clients on hold while they deal with hardship applications from existing clients. We expect that in the transition out of lockdown the bank lending will also open back up to follow the real estate movement.
If we look at the ANZ economists they are expecting a drop in GDP and house prices.
If we look at the real estate agents they have said they have a flood of new listings holding out until after the lockdown.
Based on these influences and our own analysis of the market we expect a swing from what has been very much a sellers market for the past 12 – 18 months into a very strong buyers market.
This means if you’ve been wanting to buy, or, holding out for the market to turn now is the time to jump into the market and see where you fit and what you’re capable of doing.
If you get in now, before the banks tighten any credit criteria and before any drop in prices filters through to affect your existing property then you will be in the strongest position to negotiate with vendors looking to sell.
Now is a great time to buy as housing has always been one of the safest investments in NZ, interest rates are at an all time low and my prediction is they will get lower, coupled with a potential decrease in house values it is sounding like pretty safe bet.
The head of research for Corelogic has stated that the underlying causes to push up our house prices are still there (net population gain, lack of supply, restrictions on construction) so the only thing bringing prices down will be fear and unemployment.
In summary the way we do business in the property and finance world may have changed but it is still moving, what goes down must go up.
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Allan Rayner
Mortgage Adviser
Phone: 027 279 5933
Email: [email protected]
