Old adages can still remain relevant today
The old adage goes "Buy the worst house in the best street". Is this still valid in the current market? With prices static or falling, is now the time to take advantage and move to a more desirable suburb?
Daniel Coulson: Chief Executive, Ray White New Zealand:
Buying a property with the opportunity to add value is important in any market, but it can be even more important in the present environment. Particularly for those that are willing to take on a project due to the ability to achieve capital gain when there is lesser levels of price growth in the general market.
It should be noted though that for many buyers, the increasing cost of construction has meant a home that requires only cosmetic modification may be preferred. So, in short, for some, yes. For others, they may be looking for the second or third worst house in the street. For those with less inclination for a do-up, we suggest the best house in the best street.
Bryan Thompson, CEO Harcourts New Zealand:
There are so many sayings regarding real estate that we could probably write a book, and it might be a best seller! This particular one however can be true.
What it is saying is that if you select a property in a sought-after location, that has the ability to be improved, then you will likely reap the benefit of these improvements over time. Conversely if you buy/build a home that is the reverse, far more valuable than all others in the location then you may struggle to see success when selling. In reality though, people buy property because it meets their needs, school zone, close to work/family, size, and price range. Best house in the best street is a great aim, but only if it meets your needs.
Sit tight or trade down? Are you seeing a trend in people trading down due to mortgage pressures? Is this worth considering or is it better to try and sit tight?
Bryan Thompson, Harcourts:
Every homeowner/investor’s financial position is different and personal so it wouldn’t be appropriate to give advice in this case. It would be like a doctor prescribing before a consultation. What I will say though, is that should you be considering reviewing your property position due to financial, or any other pressure then you take advice before jumping into action.
Speak to your bank/a qualified mortgage broker to identify your options to “ride out” the current bump in interest rates. A restructure may solve any immediate challenge. A respected real estate agent can advise on market conditions and potential sale price range to put in your decision-making matrix. Take your time to make a sound, well considered decision and if this decision is to sell then select a great real estate agent to assist you on this path.
Daniel Coulson: Ray White New Zealand:
We continue to see a mix of people trading up or down for various reasons. For some, there will be financial motives, and for others, it will simply be their stage in life, whether they still need to be in school zones, need as many bedrooms or simply want to move to a lower maintenance property, such as an apartment. For those experiencing financial pressure because of mortgage repayments, there will be a number of factors to consider, such as break fees on their mortgage (where applicable), the cost of selling and moving and when they purchased the home they are currently living in. Our best advice is to talk to your bank or mortgage broker, talk to a licensed salesperson and seek advice specific to their circumstances.
● Monthly Roundup is a Q&A with advice from New Zealand’s leading real estate brands.