What's going to happen to property over the rest of the year?
As we know, the Reserve Bank of New Zealand (RBNZ) kept the official cash rate (OCR) unchanged in February, keeping a period of stability going that will please many Kiwis looking at property investment. RBNZ Governor Graeme Wheeler expected this to stay on hold for quite a while, but what have other bodies and people around the country been saying? And how does it impact residential property investment prospects? Let's take a look.
People expecting pushy prices
The February ASB Housing Confidence report took a look at what people think will happen with interest rates and home prices across the coming months. It found that 59 per cent of people surveyed think house prices are going to increase, which bodes well for anyone who has already purchased an investment property – capital gains are your gains!
And even though you might think price rise expectations would deter people from purchasing, only 6 per cent of respondents to the survey think that it's a bad time to buy a home at the moment. This is likely linked to one other change from the report: Fewer people are expecting an interest rate hike in the coming year.
However, a majority still believe we'll see an increase at some point. So for now, it could be a good idea to keep a close eye on investment property in New Zealand, and whether you can secure a great piece of real estate sooner rather than later.
Getting around the prices
According to a New Zealand Herald article from February 3, there is one way people are getting around rising prices. The Reserve Bank's recent ruling that stopped banks from giving out too many loans with an LVR of under 20 per cent has an exemption, and that's when you buy a new home. So with prices expected to go up and sentiment good, there are many ways in which 2015 property is looking great.
But don't expect overnight profits!
Even if now is a great time to buy a property, remember it isn't a get rich quick scheme! You're buying property to create financial gains in the long-term, to set yourself up for financial independence later in life. You can speak to an Authorised Financial Adviser like us here at Goodlife for great investment advice and to see what your next step onto the property ladder can be.
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Expert