Over the past year, the housing market set a record high with clearance rates, properties selling at a premium price, and a prevailing sentiment of FOMO (fear of missing out). However, it’s now being replaced by FOOP (fear of overpaying).
Source: REINZ
Earlier this year, the Real Estate Institute of New Zealand released figures showing a drop in sales with two successive months of house price drops. Of note is a high demand in new builds, according to James Wilson, head of valuations at Valocity. New builds often have lower deposit requirements for first home buyers, while investors benefit from tax breaks.
Ironically, when the market slows buyers can react by pulling back due to the focus on negative headlines, according to Nick Gentle, a property finder and administrator of the Facebook group Property Investors Chat Group NZ.
Murray Smith, an auctioneer of Barfoot & Thompson, agrees with this statement. By the time buyers are taking their opportunities after “the market has gone quiet”, the opportunity has passed.
As stated by Jarrod Kerr, a Kiwibank chief economist, buyers should get their finances sorted if they want to take advantage of the market as banks are being constrained by the CCCFA (Credit Contracts and Consumer Finance Act) regulations.
New builds continue to represent great value for money with lower risk when it comes to fear of overpaying (FOOP).
If you’re a first home or next home buyer or an investor, it is important to keep calm and carry on and make good decisions while keeping in mind that in the long term it is generally better to be in the market than not.
There’s no time like the present to discuss your next steps with one of our team. Simply email us and we’ll set up a time that works for you.
Whether you want to take advantage of the current market opportunities or talk through where to go from here and how to end up in the best possible position, we’d like to help you.
