Hey Everyone! Hope you didn’t get caught in that massive downpour on Tuesday, we were showing someone a house and got soaked right at that moment! Recently we have seen a distinct increase in buyers looking and enquiring at property, is this going to be the start of the recovery phase? Here are a few market variables worth keeping a close eye on.
- Lending Rules: Probably the biggest psychological change that the buyer market has experienced is the change in the CCCFA rules, which was perceived as this highly intrusive step to getting mortgages. The easier it is to get a mortgage, the more buyers we will see & shorter mortgage processing times.
- Testing Free Travel: Although covid testing seems to be commonplace now, there are still people that hideaway from the dreaded swab up the nose. With testing free travel becoming more common place, we will start to see more people moving around. People coming and going play an important part in a healthy property market.
- Interest rates: Banks have started to increase the rate they stress test buyers and with the Reserve Bank indicating further increases, it would be safe to expect higher interest rates, which means buyer affordability will fall, along with prices.
- Affordability: Although house prices have fallen, affordability has stayed consistent due to interest rate changes. So there isn’t really a ‘cheap’ time to buy a house. However, you can look at when it is easier to purchase – in these cooler markets there aren’t lots of buyers competing at tenders, deadline sales, auctions, which can make your buying journey a lot smoother.
- Share Market: Managed funds, like Kiwisaver, have a focus on shares, so if these markets fall, so will buyer’s Kiwisaver balances. This is not ideal when the Kiwisaver balance is an essential part of a first home buyer’s deposit.
Regardless of what the market does, people will always need to buy and sell, it will just be a matter of when. From what we learnt in the lockdowns, if sale volume drops – it is simply buyers delaying their plans to buy. Eventually that backlog of buyers who need to buy will catch-up.
If you are thinking of buying or selling, get in touch, we can help you position your plans as best as possible. Have a great week!