2020 has been an interesting year all round, and the property market is no exception. Check out Paul’s market update and predictions below.
“Something I’m getting asked a lot at the moment is if property prices will continue to rise. I’m also getting asked if interest rates will continue to decrease.
First off, a little disclaimer: I’m not a crystal ball – no one is – and all views are my own. However, I have a unique insight into the property and home loan market due to the nature of my job. In fact, I live and breathe it.
My analysis of the current property market is purely based on supply and demand. In general, New Zealand has had a lack of homes available. Pre-COVID, the property markets in some of the bigger NZ cities like Auckland and Wellington started to stabilise slightly, with supply exceeding demand.
However, post-COVID, with ex-pats returning to purchase homes, and buyers having more disposable income available due to being unable to travel, the demand for houses has exceeded the supply all over the country. In short, the market is booming at the moment.
Alongside the above, the banks are offering lower interest rates and a relaxed approach towards LVR, or your investment property equity position.
The best approach for many buyers right now is to wait for the right opportunity to buy a property. Take your time. There are still good purchases to be found, but you need to be patient.
Interest rates will most likely stay low for the next year or two, and I predict that the property market will also stay on the rise. It’s unlikely to slow down just yet.
If you already own a property or properties, it’s worth keeping in mind that your savings and any extra disposable income may be better directed towards your current debts. It’s an excellent time to refinance your home loan at a lower rate and a shorter term to allow you to pay it off faster. Sometimes this makes far more sense than substantially increasing your debt and rushing into buying another property.”
While we’re home loan and insurance experts, our blog posts are for general information purposes only and are not intended as financial advice. If at any stage you need personalised advice, get in touch on 0800 346 765, or email firstname.lastname@example.org.