The past few years have seen bumper returns on property investments across the country. It has been a seller’s market for so long, that many first-time buyers have not been able to enter the market. However, the current increased number of properties going on sale, combined with longer turnaround sales times and higher interest rates, has meant New Zealand’s property market is slowly beginning to cool off.
Places like Auckland and Wellington, which have seen some of the greatest price increases – to the point of being named some of the least affordable cities in the world –are now seeing a plateauing or even a reversal in prices. Houses for sale in Christchurch are by contrast still holding steady, albeit at a slower growth rate than previously witnessed, with an average increase in value of 0.9% as of April this year. This means that Christchurch may prove an ideal investment area for first-time buyers, as while growth is slow, thereby making homes more affordable for purchase, buyers are at less risk of their properties decreasing drastically in value during this current downturn when compared to other cities.
While it may be tempting for first-time buyers to hold out to see what the market does and if prices fall further, it is important to remember that after every drop comes an inevitable boom. Hold out too long, and it may be too late to make the most of the current buyers’ market. Buying in a good area and timing a purchase well may mean seeing a slight dip in value for a time in the current climate, but holding the course could lead to significant returns on investment later on. Thus, purchasing a house in this downward trajectory may be just the key for many new buyers to finally enter the market.