New Zealand is experiencing an artificially-suppressed housing market. The small decline in house prices due to less buyers in the market as the banks lending criteria makes it harder to secure a mortgage. However, as borders reopen, house prices – alongside demand – could reignite as those locked out through managed isolation restrictions return looking for somewhere to live.
The war in Ukraine, on top of covid, could see many kiwis heading back to perceived safety in New Zealand as happened after 9/11 and the 2008 global financial crisis. This would reignite pressure on home buying as renting is becoming unaffordable due to the number of rental properties plummeting on the back of Labours new property tax laws. Investors are selling off or increasing prices substantially to cover these tax costs and also to adapt to increased mortgage interest rates. Higher rental rates could see investors coming back into the market that will also put upward pressure on prices.
Building now is a great option. No competition to buy, you build exactly what you want and any small price fluctuations should be absorbed by the increase in value of your finished home.
New homes with good insulation and glazing are warmer, drier and cheaper to heat. This is good for both your pocket and the environment. By building new, you can also ensure that eco-friendly appliances and water-conserving plumbing fixtures are fitted throughout, which will help to reduce your utility bills. And with inflation on the rise and increasing interest rates, every bit will help in the coming 24months.