By Lochore’s guest blogger and sales agent Chris Gemmell
The residential property market is currently undergoing change – I refer to it as ‘shifting sands’. And this is partly due to the new Overseas Investment Amendment law which came into effect on 22 October 2018. The long-term impact of this new law on house sales in Auckland is not yet fully known.
This new law prevents people who do not have New Zealand citizenship from buying residential properties in New Zealand – with some exceptions. Australian, Canadian and Singaporean citizens are not included in these restrictions. And New Zealand residents, even if they are not currently living in New Zealand, will still be able to buy land here. But anyone currently living here on temporary visas such as students, visitors and those on working holidays, can no longer buy New Zealand residential property. Prior to this long-overdue legislation, migrants without residency could purchase New Zealand homes.
As with any major legislative changes, whether they are positive or negative, this latest legislation has resulted in a temporary speed bump – a subduing of the market – until the dust settles and we become used to the new normal. People tend to put their hands in their pockets at such times and adopt a ‘wait-and-see’ attitude.
Since the beginning of spring, the trend has been for more properties to come on to the market with an asking price rather than going to auction. This removes some of the pressure and uncertainty for buyers. Once a buyer has obtained pre-approval for a bank loan, they can make a clear-headed decision and present an offer.
Potential buyers who may have been sitting on the fence, quietly researching the market, checking out auctions and still hesitant to dip their toe in – take note, we’re about to head into the ‘pre-Christmas squeeze’ period, a seasonally imposed deadline.
Buyers want the peace of mind that comes with having successfully purchased a property before Christmas, even if they haven’t settled. As the number of new properties coming on to the market tends to dwindle the closer we get to Christmas, buyers are more likely to make snap decisions because of this.
Experienced sales agents ensure they work the necessary hours before Christmas to ensure they are available to make a sale happen for buyers and sellers.
Interestingly, you may have noticed the interest rate war heating up recently between the banks, with fixed-term interest available at under 4% per annum. This is very cheap money and will help to stimulate market activity, particularly for first home buyers who may be able to borrow more money, enabling them to take the first step to home ownership.
Now is not the time to be sitting on the fence. If buyers are in for the long haul, I advise them to be decisive and take advantage of the low interest rates currently being offered.
There’s now a more level playing field, which is particularly good for first-home buyers and for families needing to buy a bigger nest to accommodate a growing family.