Buying a property in New Zealand looks easy but it is not. Just because you have the money to buy the property you like does not mean it’s a great decision. Well, in some cases there is but it is important to do your research and learn about the property market cycle.
To help you out, here is part 1 of the blog series “Your Ultimate Guide to Buying Property in New Zealand.”
Learn about the Property Cycle
First and foremost, you need to learn all about the property cycle. The property cycle is a pattern in the real estate market that helps property market professionals and buyers navigate the industry.
Think of it as a schedule wherein the property market is experiencing a particular trend. In one part of the cycle, the property market is affordable meaning buyers are on a roll. There is also a part wherein property prices are high, so investors and sellers make more money.
To put it all in perspective, let us name all stages of the property cycle, there are four by the way.
The Boom
In this stage, property prices are better, meaning they are higher. But that does not mean that buyers refuse to buy. The boom is also a time where property optimism is back meaning despite the higher prices, buyers still find value in purchasing a house.
The boom greatly benefits sellers and investors alike. They get capital gain from an investment they have been managing for many years.
The Bust
This is when things slow down, property optimism is low meaning buyers are not that active. Properties then tend to stay in the market longer. That would result in a decline in property price.
The Bottom
The Bottom always comes after the bust. With property prices low, buyers are keener to engage with more financial flexibility. This is the buyer’s time to go crazy and find the best property that suits their preferences and budgets.
The Recovery
This is when property prices are improving. The market is positioning itself for another boom.
Now, can you determine what is the best stage for you to make your move in the property market?
Know about the law
Property agents and firms have legal responsibilities towards buyers that they need to observe at all times. This is for the importance of transparency and financial security. However, there are also laws that as a buyer, you must follow. You should hire a property lawyer to help you with legal processes especially with the purchase process.