The New Zealand property market is one of many industries around the world that was heavily affected by the Covid-19 pandemic. As the world shifts and changes, so too does its people, places and industries. As house prices soared in 2020, the NZ Government in March of 2021 launched a suite of policies aimed at helping first-home buyers into the market, including the controversial move to end tax deductions on interest costs for rental properties, as investors made up the biggest share of buyers in the market. There is some hope on the horizon for hopeful homebuyers though, amongst the inflated prices of metro and suburban properties, with the Real Estate Institute observing the start of a gradual slowdown in the pace of price growth. Here at Mortgage Masters, we are dedicated to giving the highest quality of care and aid to first home buyers in Auckland. We’re here to highlight some of the main impacts on the property market and some tips for potential investors and first home buyers.
Rising House Prices in Metro Areas
Mortgages in Auckland were harder to get after the Covid-19 pandemic and this is because prices in all metro areas and main cities skyrocketed, as well as lending rules from banks becoming tighter and stricter. With construction slowed, constant lockdowns and border closure, there are less properties on the market and more people looking to buy. This is because everybody is working and living at home, and they are unable to holiday. More time at your base makes you want to improve your base, whether this means undertaking renovations or looking to save to buy your first home. Many are moving rural or buying landscape property in the outer regions of the country, as this is a better way to spend time with family and create a nourishing home environment. Prices skyrocketed in Auckland, Wellington, Christchurch and other major New Zealand cities, between 20% and 28%.
How Homebuyers can use This to Their Advantage
Prices surging creates a somewhat negative outlook for prospective home buyers in metro areas, especially first home buyers, however for established homeowners, this could mean good things. Many are cashing in their capital gains and capital growth on their metro properties and using the money to move to lifestyle property or rural farmland, where they can get more bang for their buck. Here at Mortgage Masters, we are a leading national investment property mortgage broker and we are always happy to offer our services and our advice on investment property lending, so simply get in touch if this appeals to you!
Deceleration on the Property Market
As first home buyers struggle to achieve pre-approval, we recommend that you look at saving more, securing a larger deposit and monitoring your spending as soon as you start to think about purchasing property. Mortgages in Auckland have become harder to secure, however as the world moves on from the debilitating pandemic, there is a silver lining emerging. It is evident that deceleration on the property market is beginning to happen, as prices slowly drop and more properties such as big apartment buildings, are set to completion. As the world moves slowly back to normal, prices will become stable and more property will become available.