It may come at no surprise to hear more talk of a “flat” Christchurch real estate market as we close out the second quarter of 2019.
New Zealand wide, property values are generally rising, albeit slowly. Here in Christchurch however, the property market is nicely balanced, so it’s no surprise that values are still more or less the same. Indeed, the average value has hovered in and around $495,000 for the past two years.
It is important to note that a steady market is a healthy market. A 1-3% rise year on year is the a recipe for healthy and stable growth. Sudden and fast growth is never sustainable, as the faster a market grows, the harder is inevitably will fall. Thankfully our current Christchurch market is experiencing a stable period, and one that is projected to last. Mortgage rates and the current LVR rules are likely to stay as they are, particularly given that banks are still working hard to attract the best borrowers.
With this said, when you’re both buying and selling in the same market conditions, be comforted knowing that your money is still being put to good use. You may not be receiving the price for your home you originally wished for, and on the same token you will not be overpaying for your next home and property.
Generally in real estate, time IN the market is always more important than TIMING the market. The value of homes will hardly ever fail to grow over time, so if you’re playing the long game, you will inevitably do well.
With doubts that higher mortgage rates are on the horizon in NZ, it is a perfect time to take advantage of this situation.
How?
You have the upper hand if you’re buying for owner-occupation, with a view to hold the home for the long term. Fixing the bulk of your mortgage at this unprecedented low rate, and then paying off your floating portion as fast as you can, will save you thousands in the long run. Hit your mortgage hard for the next year while you have time.
Yes, as a first home buyer it can be especially tempting to renovate, decorate, and spend your extra cash on smaller improvements, but I tell you that if you’re buying for the long term, be patient! It is better, in every situation, to attack that mortgage while you can, and renovate later when you have more equity in your home.
As long as you’re buying in a good location with a history of strong demand, and you’re also looking to hold your property for the long-term, you can do really well purchasing in a slower market.
Not looking to buy again?
When was the last time you restructured your current loan? If you’re willing to put in the work, I would always suggest talking to your current bank or mortgage broker to see how they can help you. Home owners entirely underestimate what a bank will do to keep them as their client, so if you feel you need to break your current term early in pursuit of a lower interest rate, ask the question! There is nothing to lose, thousands of dollars to gain.
Moral of the story, do not be afraid of a slower market. There are always positives to be gained out of any market, you just need to know where to look.