4 predictions for NZ property in 2016
How are your foresight skills? While none of us have time travelled from the future and know exactly what's going to happen (unlike Biff, from Back to the Future II), there are a lot of predictions for property floating about.
They should always be taken with a grain of salt, but can provide a general outline of what's going to happen this year. It's useful for shaping your mortgage calculations and real estate planning. So, what's 2016 supposedly got in store?
1. A stronger economy
In its quarterly round of predictions from November 25, the New Zealand Institute of Economic Research (NZIER) correctly predicted that the Reserve Bank would cut the cash rate in December. It also anticipates a rebounding overall economy in 2016, with growth returning to around 3 per cent.
2. A growing population
In particular, the NZIER thinks population growth is set to expand. That's going to increase demand for housing, which could boost the competition you face entering the market. It's a handy reminder that getting all the property and mortgage advice on your side that you can is essential.
3. A drop in prices - temporarily
"If there is a small correction in prices we are likely to see quite a lot of people coming back into buying mode," he added. That could mean first home buyers returning to the market in a big way, forcing another upswing in values. If you've been waiting for the right moment to get a slightly better deal, 2016 could be your time.In his 2016 outlook on property for interest.co.nz, economist Shameel Eaqub laid some choice words down for Auckland real estate. Specifically, he thinks prices are going to go down by about 5 per cent. However, this might be a small window of opportunity.
4. A wide spread in growth
While Auckland values are expected by many to drop in 2016, this could have substantial benefits for surrounding areas. Jonno Ingersson of QV thinks that "most of the top half of the North Island will continue to increase," as people look for affordable options out of the City of Sails.
He noted that more relaxed LVR rules could make it easier for people to secure investment home loans outside of Auckland too.
Of course, this is only a tiny piece of the property puzzle. But wherever on the real estate ladder you are, taking on the potential trends for 2016 can help you shape a strategy. When you're ready to take a step forward, don't forget to get the handy mortgage advice that we can offer you here at Squirrel.