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We’ve witnessed one of the hottest property markets in recent years. Lately, we can see prices dropping when we check on our favourite real estate site and while some people are jumping at the opportunity to enter the market at a cheaper price, others are holding off with the intention to enter the market even cheaper, down the line.
While it may be tempting to try to time the housing market and buy the proverbial bottom of the dip once things cool off a bit from rising supply, rising rates, or less market demand, we always suggest to our clients that if you can afford to buy, the right time is now. Here’s three reasons why.
New Zealand’s house price trajectory has always been upward
While past performance never guarantees future performance, it’s interesting to look at the data. For the New Zealand housing market, the data tells us that house prices can fluctuate up or down at any given period. Data from REINZ shows over a 10-year period from 2010 to 2020 New Zealand’s median house price almost doubled, increasing by 96 percent. While we’re seeing house prices dropping, entering the market and seeing a small loss over the short term is irrelevant against the long-term average.
You can’t pick the bottom of the market
Time and time again we hear about people waiting for the bottom of the market before committing to property. Being able to predict the ‘bottom’ of the market is near impossible. Fear of overpaying often leaves people missing out to the point where they either miss their opportunity to buy or buy after the market turns up and end up paying a lot more than they needed to.
Cost of Building Materials is Rising
The average cost of building a home in New Zealand’s main centres has risen 21% in the past year, with more price rises expected the cost to build quality new homes isn’t going down. Not only have we seen an increase in the price of materials, we’ve seen an average increase of 7% in each trade rate. With supply chain issues still lingering from the pandemic and inflation, further price rises are expected in the future.
Williams Corporation builds affordable, new homes in the city close to where you live, work and play. If you’re interested in making your next property move, get in touch with one of our client consultants today HERE. We’re here to help.
Note: The information in this article is not financial advise and intended for educational purposes only.