Propertyscouts Property Management
To buy or not to buy – that is the question

To buy or not to buy – that is the question National Propertyscouts

So, you’ve been thinking for a while about buying another investment property, or maybe you’re jumping into residential investing for the first time?

There’s a lot of confusion out there and it isn’t an easy time to be investing that’s for sure. Unless you’re a dab handyman new builds look like the way to go these days (if you can find a section, trustworthy builder and building materials that is). New builds require less of a deposit and have a 5-year bright line test as opposed to existing properties which have a 10-year bright line test (read capital gains in any other language!). Additionally, new builds will most likely be Healthy Homes compliant, but having said that it pays to check because some of the Health Homes requirements exceed new build code of compliance. Yip we aren’t kidding about that – go figure. We’ve given the Propertyscouts crystal ball a polish (and pinched the views of other random experts) and come up with the following insightful commentary on what might happen to house prices as we work our way through the year. If we take the national median house price, a property purchased 12 months ago is worth 24.3% more than it was when it was purchased. So even if prices drop back by say 5% that property is still worth almost 20% more than it was at the same time last year. But what if there’s a major ‘correction’ we hear you say? Well just what are the chances of a major correction? Very little we think. You see there’s the problem of supply we have here in NZ. We just can’t build enough homes to meet the demand so while that remains the case the chances of a big correction are in our view slim to none. That’s not to say prices are going to continue to climb through the stratosphere. They probably will continue in an upward trend for the next few months but then as the new LVR’s start to bite and we see some pressure on the Reserve Bank to tweak interest rates, along with the cold NZ winter things may just button off and we’ll all get to take a big long breath and keep looking at ads for investment properties, because the alternative of watching your money go backwards in the bank really isn’t an alternative at all.

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