New Zealand’s Falling Property Market Provides First-Home Buyers With Unique Opportunities

According to the REINZ House Price Index, New Zealand property prices have seen an 18% fall from November 2021’s record high. North Island properties have seen the highest price falls with property in Lower Hutt City seeing the hardest fall at about 29.8%, followed closely by Wellington City at 26.6%, and Auckland at 23.2%. Houses in the South Island fared better, however, with Ashburton District seeing the least fall at just about 1.3%, followed by Christchurch City at under 10.7%, and Dunedin City at 15.8%.

The downward slope of property prices which had begun since November 2021’s all-time high is estimated to continue for a little while longer. According to the New Zealand Herald, prices are expected to fall to 21% and not recover until mid-2024.

The falling property price in the NZ property market makes it one of the world’s most troubled housing markets, with homeowners and investors having lost billions of dollars in the 18 months since the downward slope began.

The falling price of property in the country has led to a reduction in property sales. Sellers are unwilling to sell their homes at reduced prices and make a loss in the process. At the same time, aspiring buyers who’d typically sell old homes to purchase new ones would rather hold instead of selling their homes at a largely reduced price.

The current housing market presents a unique set of opportunities to first-home buyers. With the falling property prices, first-home buyers in New Zealand now have a unique opportunity to enter the market at more affordable levels.

The challenges faced by sellers and investors can be advantageous for those looking to climb up the property ladder and become homeowners for the first time. Here are some ways first-home buyers can take advantage of the current crisis:

With property prices experiencing a significant decline, the barrier to entry for first-home buyers has been lowered drastically. The dream of owning a home that might have seemed unattainable a couple of years ago now appears within reach for many. As such, aspiring homeowners get the chance to not only make their dreams of owning property a reality but also get the opportunity to explore a wider range of properties that align with their budget and requirements.

In a market with reduced sales activities like the current New Zealand housing market, first-home buyers have more leverage when negotiating with sellers. With fewer buyers competing for properties, sellers may be more willing to negotiate on the price or offer other incentives to close the deal. First-home buyers can use this advantage to secure a better deal and potentially save money.

The slowdown in the property market provides first-home buyers with ample time to research and plan their purchases thoroughly. With fewer sales, aspiring buyers have more time to spend conducting due diligence on potential properties, understanding the local market trends, and evaluating the long-term prospects of the area without being under so much pressure to make decisions right away.

Oftentimes, sellers are open to alternative arrangements when the market becomes sluggish. With fewer options, sellers tend to be more open to arrangements like the rent-to-own option. This option allows first-home buyers to rent the property with the option to buy it later. This provides aspiring buyers with ample time to save for a larger deposit while securing a place to live in the meantime. That being said, while the rent-to-own option is sometimes on the table, it isn’t always available in New Zealand. Nevertheless, if you ever find this option available to you, it is one you’d want to consider.

In times of economic uncertainty, governments often introduce measures to stimulate the housing market. First-home buyer grants, subsidies, or other incentives may be available to support those looking to make their first property purchase. Keeping an eye on government announcements and policies can help first-home buyers make the most of available opportunities.

Are you a prospective first-home owner eager to capitalize on the distinct opportunities presented by the declining property prices in New Zealand? Below is a concise guide that will walk you through the process of making the most of the current market conditions.

You should always start your house-hunting efforts by properly defining your budget. Take the time to assess and determine the maximum amount you can comfortably spend on getting your first home before you even begin looking at listings.

With property prices at the most affordable they have been in years, it is essential to reassess the market. Conduct thorough research on the local property market to understand the current pricing trends, demand and supply dynamics, and so on. Taking the new market trends into consideration, identify properties for sale that fit into your budget for future consideration.

In a market experiencing massive price falls, buyers tend to have a wide range of options to choose from. Make sure to take advantage of this and explore your options properly. Explore different locations and different property types to find one that best suits your needs.

Purchasing a new home, especially as an aspiring first-home buyer, can be really strenuous on your finances. First-home grants can help you alleviate a large portion of that financial stress by providing you with the ample financial resources required to get the job done.

With the current housing market in a bit of turmoil right now, getting professional help has never been more essential. Engage a reputable first-home buyer conveyancer well-versed in the local market who can help you with the buying process. These professionals offer reliable insight that can help steer you in the right decision when making a purchase. It is important to note that these professionals are not financial or mortgage advisers, and so do not provide any financial guidance. Instead, they only provide legal advice and guidance through the buying process.

Are you in need of financial advice as well? You should also seek the help of a financial advisor before going through the buying process.

While the current state of the New Zealand property market may seem daunting to some, it presents an opportune moment for first-home buyers to step into the market. It is essential for prospective buyers to remain financially prudent and seek professional advice from a reputable first-home buyer conveyancer near you to make informed decisions. Though the market may continue to experience fluctuations, those who carefully navigate these waters can set themselves up for a successful and rewarding journey on the property ladder. Remember that while there are opportunities, there are also risks, so approaching the process with caution and diligence is key to making the most of this unique situation.

Disclaimer: As a New Zealand law firm, we do not provide mortgage or financial advice. Our expertise is limited to providing only legal advice to help support you with your conveyancing or with the refinancing of any legal transactions. This article doesn’t provide any financial advice or recommendations, simply an analysis of current market trends and the unique opportunities they offer.