Is now a good time to buy?
The property market continuously changes. Property prices fell 17.8 percent from their peak in November 2021 before they bottomed out in May 2023. That’s the largest fall since records began back in 1992! So you might have a lot of questions: Should I sell? Should I wait? Should I buy? Should I invest? The right decision will depend on your circumstances and what you’re trying to achieve.
Here are some examples…
Should I sell?
Property prices have fallen and if you want to upgrade your home, it’s best to generally do it when prices are down. For example: Sandra and Steve’s house is worth $500,000 and the house they want to buy is worth $1 million. So selling their house and buying their dream home currently costs an extra $500,000. But what happens if they wait and house prices go up 20 percent over the next five years? Their house is then worth $600,000… but their dream home now costs $1.2 million, therefore upgrading their home now costs an extra $600,000. That’s why it might make sense for Sandra and Steve to upgrade their home now rather than wait. However, if you want to downsize, it probably makes sense to wait until house prices recover.
Should I wait?
Jo is an investor who owns a property in Auckland. He’s seeing a lot of townhouses going up and he’s thinking about selling his house to a developer. Jo thought this would get him a premium price, but in this case, it makes sense to wait. Why? Property prices have only just bottomed out and they will likely recover over the next few years. If he sells now, he’s probably selling near the bottom of the market. On top of that, his target market is developers, but developers aren’t building like they were a few years ago. If Jo can wait for house prices and the construction industry to recover, he may get a better price.
Should I buy?
First-home buyers are making the most of the bottom of the market – they're buying the highest proportion of houses they ever have. According to property data provider CoreLogic, more than one in four houses are being purchased by first-home buyers. And in a quieter market, fewer sellers choose to go to auction, which tends to be good for first-home buyers who generally don’t like spending thousands on building inspections and legal fees before bidding.
Should I invest?
Interest rates are high. If you buy an investment property, the rent likely won’t cover all the costs, so you’ll need to top it up with your own money. Depending on what you buy, this can cost a few hundred dollars a week. If you can afford the top-up, it could be a good time to invest. Andrew and Ed are the faces of Opes Partners and hosts of