On April 27th, 2020, we shifted from a level-4 COVID-19 lockdown and many people breathed a sigh of relief. It was great news. Real estate practitioners were particularly elated by the move. The industry was categorized as non-essential. Thus, buying, selling, and other activities in New Zealand’s property market nearly came to a standstill. Although activity is resurgent, some homebuyers are sceptical about reviving their plans to own homes.
Did you shelve your plans to own a home because of COVID-19?
In this article I consider a few important thoughts as part of my work at Just Financial and the Mortgage Rescue service. Kindly note this article is general information, and is not personalised advice.
Here are the reasons why you shouldn’t put your plans on hold.
It’s a great time for house hunting
Though we are no longer on level 4, or level 3, there’s still a leash on New Zealand’s property market. Due to obvious health requirements, physical inspections and home views may need to be done differently. But don’t let this get you down.
Andrew Yeoman, a long-time property developer of Atlas Property reckons that “It’s a really good time for house hunting at the moment.” He further points out that“Off-the-plans sales don’t require in-person viewings in any case, so it can be a good time to look over plans and choose the one right for you. With a bit more time at home, buyers can really have the time to sit down and focus on this side of things.”
We suggest that you reach out to a property developer or real estate expert fast. Get some time to sit down and look through a couple of plans. You can pick out a great off-the-plan home, without the need to physically visit the place.
Procrastination May Land You the Short End of the Stick
Home inspections and constructions may have resumed to some extent. But it’s undeniable that the month-long level-4 lockdown and had animpact on ongoing developments. Property developers, like many other businesses, have taken a financial hit. This will be further compounded by tighter lending rules. In Andrew’s view, “projects with a relatively new or marginal developer may not get the financing to get a development off the ground, and only well-healed developers will be able to continue in this market.”
With fewer new homes coming up in the already supply-strained property market, there could be a serious undersupply in the short-term. Plus, Andrew reckons that “the lifting of LVR rules is interesting and would stimulate demand even further.” Thus, you could find it harder to find an ideal home, or pay more if you decide to wait a little longer.
Investing in property can still be the better choice
Recent plunges in major global exchanges, triggered by the COVID-19 pandemic, will influence investor decisions. New Zealanders may swing back to their favourite investment asset – property. As Andrew puts it.“People always need somewhere to live. I think we are going to see a pick-up in investor demand. Commercial property has even seen some interesting times in the last few weeks.”
The volatility in the equity markets could accelerate an investor rush to property. The circumstances may not fit the exact predictions by experts at the tail end of 2019. But it’s still an investor rush.
These are compelling reasons why you shouldn’t put your plans to own a home on hold. Like Andrew says, “the best time to buy property was 10 years ago. The next best time is now.” Don’t let this COVID-given opportunity pass you by. Strike while the iron is hot.