Over the past few years the housing market in New Zealand has been through a number of changes. From sky-high house prices and low interest rates, to the current lower home prices and higher interest rates, it feels like we’ve been through it all.
Recently there have been more and more mortgages issued to first home buyers, this is largely in part to the lower house prices across the country making it a good time for buyers to snap up a property. Since prices are lower, first home buyers have a wider choice of properties to choose from within their budgets.
Right now for first home buyers, the biggest impact for many is the higher interest rates. While the current rates aren’t high by historic measures (rates were once 20% + in the 1980’s!), they are much higher than what we’ve been seeing for the past 4 or so years. Being able to afford loan repayments on these higher rates is crucial, however it’s good to remember what you might be paying in interest, you are saving on house prices in the long run. It’s expected that eventually interest rates will start to come down and therefore house prices will start to move back up, so buying in a lower market is a good opportunity to create more equity over the next few years as prices begin to rise again.
But what is the best strategy to have if you are looking to buy in 2024, and what is likely to have the biggest impacts on buying your first home? Let’s take a look…..
First things first, get yourself a Mortgage Advisor. We work with you from start to finish with everything finance related - from pre-approvals and sussing your deposit, to structuring your loan, and then settling and beyond. We explain all of the jargon and equip you with all the knowledge you’ll need when buying - the more you know at the start, the less overwhelming and intimidating the buying journey is! Click here to take a look at our First Home Buyers Guide, that steps you through the whole process.
Next it's a good idea to work out how much of a deposit you have. This could come from personal savings, monetary gifts from family, or KiwiSaver and Government Grants like the First Home Loan (these are subject to eligibility, which we can help you with)
Getting pre-approved is the next step. This is where a lender assesses your current financial situation and works out how much they are willing to lend you for your purchase. This figure depends greatly on factors such as your deposit, income and debts, and gives you an idea of what sort of property price range you can search in.
Next it’s time to do some research! Now that you know your budget, you can start looking for properties in your desired location. If you know the area you are wanting to buy in then that is easy, however if you are unsure it’s a good idea to have a look around the suburb and get a feel for the location. Have a look at what properties have recently sold in the area, and even attend a couple of open homes to get a feel for the area.
While it can feel overwhelming, buying a home can be a simple and fun process when you have the right support. Even if you feel like you are a wee way off being able to afford a deposit, we encourage you to reach out to us for a chat - many people are often closer to being able to own a home than they think! We have plenty of options that we can look at including low-deposit lending, First Home loans, or even explore options like co-ownership with friends or family. Now is a great time to get that first step on the property ladder, so if you are thinking about making a move, get in touch and let’s see how we can help.
Contact our Christchurch based Mortgage Advisors today on 0800 005 676 and let’s chat!