The Housing Market

The Housing Market

Banks are tightening i.e. they won’t lend you as much as they did a year ago and Millenials, I think, are starting to question whether they really want to commit to a $1M+ mortgage.

Tightening by the banks is generally a good idea, but they really should have done this two years ago when we were in the midst of FOMO (Fear of Missing Out). If someone has the same income as last year and wants a mortgage to-day then the chances are the banks will offer them less. This is surprising some people, but I think this is the new normal and it will force people to start to repay debt faster- which I encourage by the way.

I am not going to make any rash predictions about the housing market, but I would simply ask you to not just read what the local media is saying, but form your own view based on what is actually happening i.e. are sellers getting what they want and if not, where are the prices relative to 12 months ago? Also, I encourage you to do some worldwide research, as some of what is happening overseas will be mirrored here.

If you want to make property investment your vehicle for retirement, then you need to be thinking along the following lines;
• Buy below market – you cannot rely on the market giving you the sort of returns we have had over the past 10 years
• Add value- renovate or better still redevelop your site under the new Auckland Unitary Plan.