House market shift favours buyers
Stuart Wills has been in the business since 1997. He says he has seen the market go up and down in that time, although generally over a 10-year period it has always risen.
Is it a good time to buy?
‘‘It depends on the situation. Over time the market has always gone up. If I was a first-home buyer, I wouldn’t have any qualms about buying now.
‘‘Yes, the prices could drop further, but in five or 10 years, they will have risen.
‘‘Rents are going up, too. The good thing about buying a house is you’re more in control of your own destiny. They can’t put the rent up, or require you to move.
‘‘If you buy a property you can fix it for a decent time and quantify what the payments are.’’
What strategies should home buyers employ in this market to get a bargain?
‘‘The key things is that buyers have more time to make a more considered decision. Six months ago, people were buying without checking properly, but now you can take more time.
‘‘Other buyers can also work on their ‘account conduct issues’. If they have bought rubbish, now is a good time to sit back and tidy that up.
‘‘They may also be able to sell something like a boat to raise more of a deposit. They have the time to do that when previously they didn’t. Houses were being snapped up really quickly and often with three or four bidders.
‘‘Buyers can also negotiate conditions – I have a client at the moment trying to get a five-week settlement.’’
Is it a good time to buy?
‘‘People are motivated to buy and sell a property for different reasons. For those who are ready to upsize, downsize, make a lifestyle change, or start a family, now is the right time to look to buy a new home.’’
Will people get a bargain in the current market, and how should they try to?
‘‘Looking at last month’s REINZ figures, we’re seeing stock levels are up, sales are taking a little longer and there is less urgency in the market, which means buyers have more choice and time to make the right decisions for them.
‘‘As that demand-side pressure eases, so too does upward pressure on prices.
‘‘And the figures suggest that we are shifting to a market that favours buyers.
‘‘That said, increases to the official cash rate – up
50 basis points on April 13, and with an outlook of further increases – tighter lending criteria, and prices that are still 7.9% up on this time last year will moderate buyer demand.’’
Gemma Ellis, an accounting student, and her partner, Shavhan Harris, a builder, are looking to buy a home costing up to $400,000 in Invercargill this year.
With house prices dropping, is it a good time to buy?
‘‘What I’ve learned from accounting is the main concern is a significant change in the local environment.
‘‘For Invercargill, this change would be [the aluminium smelter at] Tiwai Point closing, as people would lose their jobs and move to places with other work, potentially flooding the housing market and dropping prices. So, for us, the local market matters more than the national market.
‘‘We also decided to buy now as a new mall is being built which is due to finish and open by the end of next year.
‘‘This will mean an increase in jobs and more people moving to fill those positions, so prices will rise. We wanted to get in before this.
‘‘So in short, yes, it’s still a good time for us because of these local changes, especially since the bank we’re going with has fixed rates.’’
Would you advise other first-home buyers to wait to see if prices drop further to try to get a bargain?
‘‘No, I would tell them to look at their local economy and if there are any large changes looming that would affect the need or want for housing.
‘‘I’d also pay attention to legislation changes, like limits on rental properties and capital gains tax. Basically, learn some economics and understand the changes.
‘‘If you get [mortgage] preapproval and want to wait, then you’re in a better position to jump when it happens.’’
Do you wish you had bought 18 months ago?
‘‘We weren’t together then, so we didn’t have an opportunity to buy as it’s near impossible to do it alone. We have a good understanding and trust of each other, but we’re still going to do a prenup [prenuptial or contracting-out agreement] because we both know that sometimes it hits the fan.’’