Should I stay or should I go? Words to a great summer song, and the catchy tune to one of the major banks’ latest marketing campaigns, aimed directly at home loan customers.
If the banks are starting to vie for customers’ attention and market share in this space again, it’s fair to presume that they intend to ease regulations around how much capacity they are allowed to take on and approve on their ledger.
It’s also a good indication that they have some internal predications of a more competitive lending situation on the cards.
Over the past couple of months we have seen positive articles being written backing up the renewed lift in average house prices, especially in Canterbury, and we are seeing the housing market has an upward trend happening again.
The result of this trend will be great for those already on the property ladder, but it should also be read as a sign to start researching and taking a step forward if you are new to the market.
We have seen it before, so it’s not a new situation; rather it’s a situation that those starting out should be mindful of.
The cost of paying slightly more in interest rates in the short term will be outplayed by capital gains over time. Unless you are looking at a completed home, there is approximately 9-12 months until the build is completed from contract, through design, consents and the actual build.
I came across a great analogy about paddling a wave (humour me for a moment, if you will). In short, if you want to catch a wave the first thing you need to do is start paddling, but you can’t wait until the wave is underneath you to start paddling. If you do, you will miss the wave and it will ride underneath you. You need to start paddling before the wave comes, so you are on top of it and can enjoy the moment with excitement.
The market is feeling a bit like this right now. The housing wave is in the distance and moving closer. If you and I were talking, I’d be advising you to turn your surfboard towards the shore and start paddling now (gathering info on building options and locations, plus starting to talk to banks or brokers about a pre-approval) because that wave is getting closer.
If you are thinking about property, you will want to be on top before the influx of buyers joins the wave. If not, there will likely be more competition and no doubt about it, house prices will rise, and you will be bobbing around in the ocean wishing you’d paddled sooner.
