Firstly, I just want to make this clear.
High interest rates mostly suck!
The higher the rate, the higher your mortgage repayments.
However, purchasing a property isn’t just about getting a low interest rate—it’s about finding the right property for you.
And, that’s where you’ll find the unexpected benefits.
Let's dive into it!
1. 75% more options
There is now over 75% more properties listed for sale, compared to this time last year when record low interest rates.
The CCCFA legislation and higher interest rates have pulled significant demand from the market.
Fewer buyers meet the bank's eligibility criteria.
Fewer buyers are able to buy a house.
Fewer houses are selling.
Where there might have been 10 homes for sale in your neighborhood last year, there are now 18.
Gone are the days of crowded open homes and auction rooms.
Less buyers = less competition for you when looking for your ideal home.
2. Move in now
Up until recently, buying off the plans meant purchasing a new build well before construction was finished, often even before it was started.
High interest rates have forced many buyers onto the sidelines. This drop in demand has provided a unique opportunity in the new build market.
Keen buyers can now make the most of 10% deposits, buying new without having to wait 12+ months to move in.
Expect to see more new build townhouses available to move in immediately or within 1 or 2 months this year!
3. Save 17.4% on Purchase Prices
Another effect of higher interest rates is cooling prices.
For the last 12 months we’ve seen more than a 17% reduction in purchase prices in the Wellington region.
During that time Kainga Ora lifted its First Home Grant new build price cap to $925,000.
How does this affect buyers? Well, for many it’s opened the door to a whole new tier of property opportunities.
When historically many first home buyers were limited to a dated 1 bedroom flat, now a brand new 2 bedroom townhouse is within reach.
My advice? Make the most of this unique window of opportunity before we’re back in the FOMO market we’re all so accustomed to.
4. Short term pain, long term gain
You’re either paying more for interest or more for a home.
Higher interest rates pull demand from the market causing property prices to drop.
Lower interest rates push demand into the market causing property prices to rise.
If you purchase today, your mortgage repayments may be higher than you were expecting.
But once interest rates drop, your mortgage repayments will drop as well.
Short term pain, long term gain.
Hi I’m Hausia 👋
I help first home buyers make better buying decisions.
If you want access to arguably the best off-the-plans mortgage advisor in Lower Hutt, click ‘contact us’ below or head straight to his website here.
If you have any questions about something you've read in the blog, email hausia@faisandier.group.
Comments