It’s A Buyers’ Market So Take The Advantage! Here’s 9 Reasons Why…
1. Falling House Prices and Affordability:
Property prices have been decreasing over the past several months, making homes more affordable for potential buyers.
The drop in prices has improved affordability, especially compared to the rapid price escalation during the previous boom.
The perspective is that rising incomes coupled with price declines have made properties more economical.
2. Advantages for First-Time Homebuyers:
Lower prices make it more feasible for first-time buyers to enter the market.
While mortgage rates might be higher, the overall mortgage amount is smaller due to reduced property prices, resulting in significant initial savings.
Increased affordability widens the selection of properties for first-time buyers, including standalone houses.
3. Implications for Existing Homeowners:
Existing homeowners selling at a lower rate might experience a decrease in sale proceeds.
Buying within the same market, the lower purchase price offsets the lower sale price.
4. Stabilization of Prices and Historical Trends:
Potential buyers are concerned about prices continuing to fall.
The perspective suggests that negative equity is manageable if homeowners can afford their repayments and don’t plan to sell.
Historical trends of consistent property value increases over extended ownership periods.
5. Increased Inventory Benefits Buyers:
The shift from a seller’s to a buyer’s market has led to a significant increase in available housing stock.
Buyers have more choices and reduced pressure to rush decisions due to the abundance of options.
6. Interest Rates and Fluctuations:
Rising interest rates could discourage potential buyers, but fixed rates might be stabilizing.
The perspective suggests that recent decreases in US inflation offer hope for stable interest rates.
Long-term perspective and seeking financial advice are advised to navigate rate fluctuations.
7. Timing the Market:
Experts caution against trying to time the market perfectly.
Instead, they recommend potential buyers to act if they are financially ready, find a suitable property, and can manage the commitment, as waiting might lead to missed opportunities.
In Conclusion:
The overall message is that despite concerns about falling prices and rising interest rates, the current housing market presents potential advantages for homebuyers.
Lower prices, increased choices, potential long-term gains, and historical market trends suggest that now could be a favourable time to make a purchase.
Meet Martin Eagle: Christchurch's licensed broker, backed by 25 years of property expertise. With a network of lenders, he turns dreams into reality—specializing in first-time buyers, Kiwisaver, and more. Efficiency is paramount. If others say no, Martin finds a way to say yes. Your dream property awaits—connect with Martin now.
Now is a great time to review your loan structure. Chances are, due to the high interest rate environment we are in, you will likely be coming off lower rates than what’s available now and for some time.
Regardless of whether you have a loan due to be refixed soon or not, it’s always worth reviewing to ensure that it’s set up to meet your current and future plans and goals.
It may have been some time since you last did this but plans, circumstances, jobs, income and life stages change so it is vital you review to make sure the structure suits you and minimises interest paid to allow you to become debt free quicker.
Economic and interest rate forecasts also change so this is another reason to review to ensure the structure takes this, and your interest rate strategies and risk appetite into account.
The review may be as simple as a quick health check to confirm its suitable or may be more in depth and involve restructuring, breaking and refixing, tweaking the repayments, interest only periods, increased borrowing for home improvements etc.
Even minor changes such as increasing repayments can have a big impact on how quickly you can become debt free and reduce your interest costs, though this may be a challenge in the current high interest rate environment.
There are other ways to reduce interest costs such as utilising a revolving credit facility. All banks have this type of facility, ANZ call it a Flexible Home Loan, ASB an Orbit, BNZ Rapid Repay and Westpac Revolving Credit etc.
The key benefit of revolving credit is that it can save you interest by reducing your daily loan balance as much as possible. Revolving credit loans are transactional accounts, like an overdraft in many ways. You have your salary paid directly into this account thus reducing the balance, as interest is calculated daily you keep the balance as low as you can for as long as you can. You can also make lump sum payments into the account and withdraw again when needed.
Another way is an offset loan, these work by linking your savings account to a loan and you only pay interest on the difference between the two balances. For example, you have $50,000 in savings and an offset loan with a balance of $100,000, the two accounts are linked so you only pay interest on the difference – $50,000. These types of account are great for those who need to keep funds separate (e.g. provisioning for tax & GST) but want to use those savings to reduce interest costs. Only Westpac, Kiwibank and BNZ currently offer these facilities.
These are just some of the options available to assist in paying the mortgage off quicker, I am here to help so please get in touch to discuss as you could shave years off your mortgage and save money!
With 20+ yrs in finance, Gareth builds trusted client relationships. Specialized in mortgages & investments, he offers comprehensive advice, prioritizing your financial goals. Your financial journey, guided by expertise.
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