BUILD NOW BEFORE INTEREST RATES HIT

There is some substance to the saying “there has never been a better time to build” – it is a phrase that is often thrown about, but the economic climate has certainly brought a window of opportunity and affordability to those looking at entering the building market.
Throughout New Zealand, the Milestone Homes franchises are prepared for a bumper year due to the Auckland housing shortage, continuing Christchurch rebuild and the Government exempting new builds from the LVR restrictions.
However, the good news for the industry is dampened slightly by the increase in interest rates for the first time since 2010. For recent first time home owners this will be completely new terrain, for others it will bring back unwelcome memories of years past.
Given the rise of 25 basis points introduced last week, Milestone Homes is advising that potential home-builders seriously consider building sooner rather than later, and take advantage of a fixed-rate loan.
Figures released from PWC show that this is a popular option for those entering the housing market, with 44 per cent of mortgages floating as at September 2013 down from 63 per cent in March 2012.
Taking on a construction loan and taking the leap into home ownership is a daunting proposition for many, however, with the LVR Rules making building more feasible than ever before now is the perfect time to enter the market before resource constraints are felt later this year.
Building consents are on the rise throughout the country, predominantly in Auckland and Christchurch, but pleasingly also throughout regional New Zealand. With 21,300 new homes being approved in 2013, the highest number since 2007, it seems many have looked ahead and seen that building a new home now is the answer and as a side benefit will avoid the interest rate hike by locking in a fixed-rate mortgage in anticipation of the Reserve Banks actions.
With home ownership historically resulting in capital gains, as well as New Zealand’s lack of a “capital gains tax”, the benefits and rewards of ownership will remain, long after the rise of interest rates.
There is a growing list of reasons that you should consider building your own home, potential home-owners would be well served to strike while the iron is hot.
For more information on Milestone Homes and their products and services, please visit their website at http://www.milestonehomes.co.nz.