Canterbury and the top of the South Island look relatively affordable compared to where I’d expect their house prices to be.
While Taranaki, Northland and Auckland also appear to be at favourable parts of their property cycle.
Expect smaller price falls and quicker house price recoveries in these regions.
On the other hand, property prices in Wellington, Manawatu-Whanganui and Gisborne look overcooked.
Expect larger price falls and longer house price recoveries in these regions.
But if you’re buying in today, you can’t just buy anything … you’ve got to get a deal.
What’s the best way to get a deal?
Today's opportunities depend on whether you invest in new builds or existing properties.
And few people realise that the new-build market is much more responsive to price changes than the market for existing properties.
Developers must sell properties to keep their office lights on and businesses running.
They need to meet (and often beat) the market. Otherwise, their livelihood stops.
But for Mums and Dads selling their own home, they can often afford to wait to try to get the ‘best’ price.
That’s why (just between you and me) many developers are already discounting properties, so they’re inside that ‘trough territory’.
They’re dropping their pants (and prices), and investors are taking advantage.
Last week, 25 investors working with us at Opes put a new build property under contract.
One investor bought a 4-bedroom new-build house in Rolleston for $799k.
The market rate is closer to $850k – a 6% discount in an area where the property market is still 1% higher than November last year when the rest of the country peaked.
And while there are deals to be done on existing properties, vendors haven’t changed their price expectations to the same degree (yet).
Some sellers are holding on to the idea they’ll be able to get last year’s price for their property in today’s market. They won’t.
But while prices might not have fallen as much in the existing market, there are still opportunities. 77.6% more properties are listed for sale today compared to last year (realestate.co.nz).
So the opportunity for existing properties is to get a property that meets more of your criteria for the same price.
Is it a bad time to buy?
If you only think about the short term, it’s a bad time to buy. The outlook for house prices over the next 6-18 months is still negative.
For those with a long-term perspective, it can be a good time to buy. There is way more room to negotiate on price and more choices on the market.
If you’re investing for 15 years+, get ready … there are deals to be done.