With all the uncertainty happening in the world at the moment, I’ve had a few clients approach me and ask whether now is the right time to buy a house.
First of all a disclaimer: I’m not a financial adviser, economist, nor do I have a crystal ball. I am however an optimist, and this is my very personal view. You may not and don’t have to agree with me. I am also only speaking about the Invercargill market as I am more familiar with that market. I encourage you to form your own view and follow your gut when making this choice. I’ve also not covered every eventuality, and I appreciate that some people will be in the very hard place of potentially having to sell due to a reduced income or redundancy. Form you own view and do what’s right for you!
A wise person once said “the best time you buy a house is when you it’s right for you”. Taking into account all the factors going on in your life right now, is it the right time for you to buy a house? Do you qualify for a mortgage? Is your job secure? Can you meet the repayments (whilst still allowing for some fun in your life). If the time is right for you, then why wait? More often than not, buying a house is a long term decision. What is the worst case scenario? If something unexpected happens, you can always sell it.
Some people are concerned that they may purchase and house prices will decrease. Here’s my thoughts on why house prices may not decrease post-Lockdown:
1. A reluctance by people to put their house on the market due to a fear that house prices will decrease, has the opposite effect. It causes house prices to increase due to a lack of stock. Invercargill has suffered from a lack of stock in the housing market for some time now.
2. After spending a month to 6 weeks cooped up in your house, you’ll either love your home even more, or be rushing out to buy a new, probably bigger one (after a quick diversion to KFC or McDonald’s of course!). Consequently, there may be more people looking to sell and buy a new house. Others may have finally had time to get those DIY jobs done, so they can finally look to upgrade to a bigger home for their possibly growing (given that there will no doubt be a baby boom in 9 months) family.
3. And finally, separations. No doubt after spending all this time together, a few people will be calling time on their relationships. Some of those houses will be sold, with both parties looking for their own new house, others will be bought out by one party. Once the fall out is dealt with, those people will be looking for new homes. And for those that met the love of their life on tinder during lock down, well they will be looking for a new love nest together.
Buying a house is an investment, and like any investment, there are risks. House prices could fall or increase over night for any reason. Make the decision that’s right for you. And when you do, we would love to help you!!! I enjoy talking this through with clients as each person’s situation is unique. If you’re wondering whether the time is right for you, please feel free to give us a call.
By Emma Stanley