Here is a quick high level run-through of the main things happening in the residential real estate market on average in New Zealand.
Economist Tony Alexander says throughout 2022 and 2023, buyers are likely to keep holding the upper hand in negotiations. All one has to do however is either secure a mortgage (not so easy at the moment) or have cash and therefore no need for one in order to take advantage of this market.
There are five strong forces acting to pull back the level of intensity of buyer demand for residential property at the moment. But just because the boom has ended does not mean a crash is on its way.
I know from experience that accurately predicting house price movements over short periods of time is impossible. But one can balance the various factors in play and see what the trend seems to be and where it may be heading.
My own experience of two first home buyers 13 years apart shows that servicing hasn’t changed all that much. It's as hard today as it was 13 years ago. But what it doesn’t show is the sizeable part of our population that are locked out of the housing market altogether.
Growing house construction is a substantial boom for the economy through extra business for materials manufacturers and distributors, architects, inspectors and so on.
Some people retain a negative view on the housing market on the basis of an expectation that the economy is stuck in recession. Actually, the recession ended two months ago and there is little chance of it returning then morphing into a depression.
There’s no doubt that there will be some good buying opportunities over the next twelve months. To make the most of them you will need to be cashed up and ready to pounce. It’s about having the confidence, knowing you can land the deal, but also not misreading your lenders and their lack of appetite for risk.
During the global financial crisis, eternal optimists always looked for green shoots. There’s no better time to look for green shoots than spring, so what’s going on?
It’s time to pull out the crystal ball and talk property prices. With house prices falling in Sydney (4.5% in the past year), the question is, will the same thing happen here? For this post I thought I’d develop a bottom-up ‘economic’ model.
As we’ve been expecting for some time, house prices have softened and continue to soften.
Even at the best of times, selling a property brings a lot of uncertainty – so what’s it like out there now that the market is a little cooler and what can you do to make for an easier ride?