Experts' tip: Now's the time to buy a house in New Zealand

March 30, 2009

If you are secure in your job and have enough money saved, now is the time to buy a house in New Zealand, say real estate experts. No one should try to pinpoint the bottom of the housing market and if the price is right, the timing is perfect, says BNZ chief economist Tony Alexander. His call sits uncomfortably with talk of recession and the worsening international outlook, but it is based on sound judgment. "As long as I figured on keeping my job I would be out there actively looking for a property at the moment," Mr Alexander said. He believes real estate sales have probably almost reached their weakest level, and activity is likely to fluctuate and start moving up before the end of the year. Mr Alexander is not alone in his views. Property author and advocate Kieran Trass says Auckland flats are the first category of property this decade to emerge as cashflow-positive - "paying you to own them" - because of interest rates and property prices. Bayleys' communications manager Scott Cordes said savvy buyers can get great deals and he cited Saturday afternoon's auction of seven Whisper Cove properties at Snells Beach which sold for about half price. More than 300 people watched as three-bedroom villas - one valued at $1.07 million - went for $500,000 to $550,000 and an apartment sold for $328,000. A year ago, buyer Sandi George found a place there priced at $900,000. At the weekend, she got it for $515,000. Mr Cordes said the many mortgagee auctions and receivership deals such as those at Whisper Cove offered great buying. But people considering buying a family home should not forget long-term principles. "If you're buying and selling simultaneously, you're in the same market. Both houses will have dropped in price by a similar percentage," he said. Agents’ Barfoot and Thompson director Peter Thompson said people needed to act differently in a weak market. His advice is: * Be cautious about borrowing - don't get a loan for any more than 85 per cent of a property's worth * Sell your own place before buying; cash-buyers get better deals and can bid confidently at auctions * Seek longer settlements: instead of a month go for two, giving more time to seek a new home * Consider selling by auction: Barfoot and Thompson says it sells auction homes in 35 to 40 days, against 60 days for fixed-price. * Fix a mortgage for the longest-term possible, up to five years if you can. * Don't over-commit - buy in an affordable suburb then move to your "wish suburb" a few years later. Mr Thompson said Barfoot agents had noticed the market picking up. More people at open homes, more multi-offer contracts and 241 properties sold last week - the highest number since November 2007 - were evidence of a change, he said.