Purchasing property in current market conditions, is it better to wait?
Recent research conducted by Goldman Sachs indicated that there is a 40% chance of the NZ housing market going bust. Further insights concluded that NZ’s housing market is over-valued the most amongst the G-10 economies.
A housing bust can be described as house prices declining by 5% or more and is calculated through ratio calculations relative to house prices to rents, annual household incomes, and inflation impacting house prices.
In Auckland alone, the average house price has increased 91% since 2007. With these escalating figures, the amount of people choosing to rent over purchasing a house is also growing. With this increase in price, people are looking at other parts of the country to purchase property both for investment and to live in. This is a smart alternative that Metro endorses for people looking to purchase their first investment property. Cities such as Wellington, Hamilton, Rotorua, and Tauranga are having an increase in house prices and purchases as people look elsewhere for affordable property.
With these noticeable obstacles for first time house buyers, it is becoming clear that the current market conditions are not favourable for the majority of New Zealanders. From the recent ASB Housing Confidence Survey, most of the respondents revealed that they felt it was a bad time to purchase property. In Auckland particularly, respondents evaluated current market conditions as being a bad time to purchase property.
At Metro, we understand that more and more people are choosing to rent over the alternative of purchasing a house. We offer professional management services for all types of property. However, there is never a bad time to purchase an investment property. We acknowledge that investors will always look to invest and therefore we recommend selecting our services if you have any enquiry relative to property investment.
On the other hand, renting property is an alternative for many people. Renting isn’t necessarily throwing money away. The benefits of renting in a market with current conditions as bad as they are mean that individuals aren’t necessarily tying themselves to significant mortgages that are typically over representative of the house’s real value. With the increases of people renting property in Auckland, it is that owners utilise efficient and professional residential property management services. Metro NZ prides itself on its friendly and well informed team. There are both incentives for renting and buying, each with their own drawbacks and negatives. The services we provide can help you with any issue you may have with either.