Your Questions Answered
We have been asked this question a lot lately: “Why would we buy now when we can wait for the mark to drop further?” and “why would I go to auction when I can wait until the property is passed in?”
So firstly, why buy now and not wait for prices to drop?
How do you know you will buy the house you want for less money in another week, month, or year? We’ve been in real estate for over 12 years and we still have no idea of when the market is going to peak or when it’s going to bottom out. What we do know is that if you buy now, and intend staying in the home for more than a few years, then you will almost definitely sell for more than you bought - the longer you own, the more likely you are to make money. Another reason is that mortgage rates are likely to increase - if you lock in now you could be a lot better off than if you fix your mortgage in another 6 months. On top of that, if you have a pre-approval in place now and don’t use it, there is a high likelihood that when you reapply you will be offered a lower mortgage amount.
Why would you buy at auction in the current market?
Well seriously, why wouldn’t you? Auctions are the most transparent way to purchase a home in New Zealand. Most of the best properties go to auction - why would you exclude them from your shopping list? And if you find a good property for sale by a means other than auction you are likely to end up in a multi-offer situation - and if you’ve been through that you will know that there is no transparency and you can certainly end up paying more than you need to.
We know that people are often purchasing their biggest asset when they buy a home, but many still over-think it. At the end of the day, find the house you want to live in and pay market price (auction!) if you have to. By the time you come to sell you probably won’t even remember what you paid - you’ll just be happy that you’ve enjoyed your home and made, probably significant, capital gain.