August 2024 - Have House Prices Bottomed Out? Why First-Time Buyers Should Act Now

For first-time buyers, the current housing market is offering a window of opportunity that may not last long. Recent declines in house prices and favourable mortgage rates have created ideal conditions for new buyers to enter the market. However, with signs that prices may have bottomed out and demand picking up, this opportunity might soon close. If you’ve been waiting to buy your first home, now could be the perfect time to make your move. Here’s why:

House Prices: Nearing the Bottom?

After a period of decline, house prices across New Zealand seem to have stabilised, suggesting that we may have reached the bottom of the market. Economic factors that previously cooled the market, such as rising interest rates and inflation, are starting to level out. This stabilisation indicates that property values might soon begin to rise again, especially as more buyers enter the market.
For first-time buyers, this means acting now could allow you to secure a property at a lower price before any significant increase in demand drives prices back up. By purchasing while prices are still relatively low, you position yourself to benefit from potential future appreciation.

Interest Rates Are Still Favourable

While interest rates have risen over the past year, many lenders are now offering competitive mortgage rates to attract buyers. These rates make borrowing more affordable, reducing your monthly mortgage repayments and overall interest costs over the life of the loan.
Securing a mortgage at these favourable rates could prove beneficial in the long run, especially if house prices begin to climb. Lower interest rates coupled with stable prices offer a sweet spot for first-time buyers, providing the dual benefit of affordability and potential future equity gains.

Demand is Picking Up

There are early signs that buyer interest is increasing, driven by improved affordability and a sense of stability returning to the market. Open home viewings are attracting more attendees, and some properties are receiving multiple offers. As more buyers return to the market, the increased demand could put upward pressure on prices.
For first-time buyers, this means the current buyer’s market might not last much longer. Acting now allows you to get ahead of the demand curve, securing a property before competition intensifies and prices start to rise again.

Tips for First-Time Buyers

1. Get Pre-Approved Quickly: With demand beginning to increase, having a mortgage pre-approval will give you a competitive edge. It shows sellers that you’re a serious buyer and allows you to act fast when you find the right home.
2. Work with a Knowledgeable Estate Agent: A good agent can help you navigate the market, identify properties that offer good value, and negotiate effectively. Their insights are invaluable, especially in a market that may be on the verge of turning.
3. Act Decisively: If you find a property that fits your budget and meets your needs, don’t hesitate. The market is showing signs of increased activity, and waiting could mean missing out on the best opportunities.
4. Consider Future Growth Areas: Look for neighbourhoods that are showing signs of growth or are planned for future development. These areas could offer good potential for property value appreciation.

   Conclusion

   While house prices have stabilised, they may soon start to rise as buyer demand increases. For first-time buyers, the current market conditions present a unique opportunity to purchase a home at a favourable price and interest rate. Acting now could allow you to secure your dream home before the market shifts. At SM Property, we’re here to help you find the perfect property and navigate the buying process with ease. Contact us today to learn more and take the first step towards homeownership.