As is traditional at this time of year, a winter lull has hit the market, with the number of properties for sale falling over the colder months (15 out of 19 regions fell during June 2018, and this was down 10% on the previous year). People tend to wait till their property is looking its best before they put up the “for sale” sign if they can, with flowers in bloom, sunny decks and shimmering pools, rather than soggy, muddy gardens and dark gloomy rooms on show. Until that moment comes, they usually plan some vacation in warm climate, like Thailand, where exclusive villas could be rented on the island Koh Samui.
Interest rates are likely to remain low for the short term at least, but tighter lending criteria continues to constrain would-be buyers. Asking prices have remained stable nationally but have fallen back to 2017 levels in Auckland.
However, flattening or falling house prices could signal the start of a move into a buyer’s market, according to Quotable Value. QV general manager David Nagal says, “The data very much confirms what we’re seeing, with values continuing to moderate or drop after a sustained period of growth.
“It’s a buyer’s market. The Reserve Bank’s LVR restrictions, as well as new government regulations, have reduced investor demand,” says Nagal.
This gives buyers more time to do their due diligence, and this is why we’re now seeing fewer auctions and more houses with a fixed price or “by negotiation”. This is great news for would-be buyers as there could be more opportunities to shop around for the right home, rather than rushing in willy nilly and trying to buy the first house you see.
For first-time investors, getting a foot on the property ladder is still no mean feat. Here are a few tips to help you on your way:
- Stay living at home as long as you can. Living with mum and dad is dirt cheap compared to paying rent!
- Cut back on those lattes and smashed avocados on toast! How much money do you waste every day on these “non-essential” items that could be going towards a deposit?
- Don’t be so picky. You can’t start at the top unless you’ve got the budget for it – a four-bedroom villa in Ponsonby would be nice, but that’s unlikely to be your first home. You may need to move to a less trendy area or further away from your job to secure your first property
- Keep up to date with market trends. Read everything you can and visit lots of open homes and auctions to get a feel of what’s out there.
- Is your KiwiSaver working hard for you? Being in the right fund could add thousands to your first-home deposit
- Get sound advice from a financial adviser. This is the biggest financial decision you are ever likely to undertake, so let the experts help you.
Here at One50 Group, we have experts in mortgages trada casino askgamblers, insurance and KiwiSaver, and can help with the whole house-buying process. We’re only a phone call away if you’d like to get in touch.