Playing The Waiting Game?

For first-home buyers, the idea of timing the market to snatch a good deal at the bottom of the market is super tempting. With the media full of talk about interest rates dropping and more properties entering the market, it might seem like the perfect opportunity to wait for further price drops and a bargain of a lifetime just around the corner. But wait. This game plan might not be the best approach, as other economic factors mean investors are coming to join the party now too. And they are not often welcome at the first home buyer party!

‍Investors are about to crash the first home buyer party, so get ready to scrap it out.

‍

Investors On the Hunt

As interest rates decrease, investor confidence rises. This means more hungry investors will be on the hunt in the same market as first home buyers. Investors often have more savvy and more capital to play with, leaving FHBs frustrated and playing catch-up. To make matters even more frustrating for first home buyers, investor activity can drive up demand and prices, even in a sluggish economy. Another factor to consider is this: despite the increased supply of houses on Trade Me, unemployment in NZ remains high, which might mean a stagnant property market rather than falling house prices.

So, you may have been playing the waiting game only to find you are now in a market swimming with all the sharks.

‍

Do Your Homework and Come Ready for Battle

Honestly, buying your first home is a mixture of preparedness and pure luck. If you are a first home buyer, rather than trying to time the market perfectly, it’s more important for you to be prepared. The best approach is to have a clear understanding of your financial position and borrowing capacity. It’s pretty simple. Speak to a financial/mortgage adviser and get your bank pre-approval loaded up and ready to go. Find a lawyer, find a builder, get your budget ready for once you do have the property. Choose the location and commit every Sunday to open homing. Getting prepared will give you the confidence and flexibility to act quickly if you find the right property. Because once you do find the right place, things tend to move pretty fast.

Remember, your first home doesn’t have to be (and very likely won’t be) your dream home, but it can be the stepping stone to what you really want.

‍

Get Your Ducks in a Row Early

Meeting bank criteria for home loans can involve jumping through several hoops. Banks and lenders will closely examine your credit history, employment stability, and current financial commitments. Ensuring your credit report is in good shape and minimizing outstanding debts can improve your chances of getting approved. If you’re self-employed, you may need to provide additional documentation like tax returns and business financials. Your mortgage adviser can help with the nuts and bolts of what banks will accept (or not).

The sooner you can resolve anything that might put off the bank, the better, so do talk to your adviser early!

‍

Be Fast or Be Last.

As investors pick up the scent of bargains to be had, the competition is heating up. The best thing you can do is start your own hunt today. Book a time with a mortgage adviser and get the information you need to come armed and ready. It is going to be a scrap out there.

Louis Pasteur, the French microbiologist (and probably homeowner), once said, "Fortune favours the prepared mind."

Buying a home is a long-term investment, and the right time to buy is when you are financially prepared!

It costs nothing to talk to our team about your options. Get in touch with us about beating those investors to your new home!!

‍

Good Luck!

Simon.

‍

About Simon

Hi, I’m Simon a Financial Advisor here at Velocity Financial. I enjoy working with my clients to help demystify all the Mortgage, Insurance and KiwiSaver fine print, and help get them to where they want to be. I am dedicated, thorough and offer professional advice that works for you. I like to help people on their journey and be a trusted person to guide them through really important events in their lives such as the home buying process. I help my clients collaborate with valuers, builders, lawyers and real estate agents to ensure a seamless experience. That satisfaction of reaching the goal with the least amount of stress for my clients is hugely rewarding. I navigate unique scenarios and tailor lending solutions for individual circumstances to save money and time. As a proud father of two and avid supporter of all my children’s endeavours, I know just how precious that time is. On the weekends you’ll also find me mountain biking, surfing, or checking out NZ’s great walks.

Disclaimer: Simon O’Neill (FSP534466) is a Financial Adviser with Velocity Financial (FSP95466). No investment decision should be taken based on the information in this blog alone. Please see our disclosure statement on our website.