PHOTO: NZ house prices
In its pre-election update, Treasury predicted the average cost of a New Zealand home will dip five per cent by June next year, before rebounding as immigration picks up and economic confidence recovers.
Reserve Bank bond buying has driven borrowing costs to record low levels and in Wellington, first home buyer Grace says the market feels ultra-competitive.
“I’ve seen little two-bedroom cottages with south-facing living rooms going for over $800,000, so it feels pretty crazy. There’s tons of people out there with babies on their front-packs and with their Mums and Dads, so it’s definitely a pretty saturated first home buyer market, I think,” she said.
Grace wasn’t sure Treasury’s predicted house-price plunge would pan out, and she was happy to put in an offer on a house now anyway.
“One you’re in this realm of spending, five [per cent]… it ends up not making much difference, I would think, especially when it’s so cheap to borrow money,” she said.
“I don’t know if I would like, wait around to see if that happens, or not.”
Michael Franks recently signed the dotted line on a house in Christchurch with his partner, and he said a short term drop in prices wasn’t likely to stir up any buyers regret.
“We’re very happy we’ve bought now. It seemed really competitive when we were going through. It seemed like house prices were going up 15 per cent above what they normally should have,” he said.
