Is Now the Perfect Time to Build a New House?
If you’ve been contemplating purchasing a new home, right now might just be the ideal moment to turn that dream into a reality. Several factors align to make this an opportune time to take the plunge into the property market. From a recovering construction industry to steady interest rates, here’s a few reasons why now could be your best chance to invest in your dream home.
Recovery from Construction Slowdown
We witnessed uncertainty across the construction sector in 2020-2021, with unprecedented material shortages resulting in long delays, increased timelines and significant build costs. These long delays and material shortages have long since disappeared bringing the sector into certain and stable times right now.
New Zealand has also experienced a period of slowdown in construction activity in the last 2 years, which has resulted in a shortage of housing supply in certain areas. However, as the economy rebounds and construction activity picks up pace, this shortage is expected to diminish and be replaced by high demand again and likely increases in product cost and scarcity of product.
Therefore, now could be the perfect time to step into the market while pricing is competitive and there is good availability of product and supply for new homes.
Long-Term Investment Returns
Beyond the immediate benefits, buying a new house in New Zealand has also always been a smart long-term investment. Our stable economy, desirable lifestyle, and growing population contribute to the enduring value of property ownership. Whether you’re purchasing a home to live in or considering it as an investment property, residential real estate has historically shown strong appreciation over time.
Favourable OCR Position
The official cash rates (OCR), set by the Reserve Bank of New Zealand (RBNZ), influences lending rates throughout the economy. Recent RBNZ announcements have aimed to stimulate economic growth by keeping the OCR steady and indicating that there is little reason for it to go back up in the near future. This strategy not only supports borrowing for home purchases but also encourages investment in the housing market. As a prospective buyer the current benefits of the OCR position and downward movement of bank interest rates leans to a positive economic environment for property investment.
Interest Rates Steady
On the back of the RBNZ OCR steadying this has led to more competitive mortgage rates offered by banks and lending institutions than has been the case over the previous 2 years. With a slight decrease in the 1-2 year bank mortgage rate (in most banks), homeownership is becoming more accessible than ever before. By taking advantage of the current steady market, you could well find yourself ahead of the next property boom.
The combination of a recovering construction market, tested long-term investment returns, a favourable OCR position as well as steadying interest rates are some of the factors that align to position now as a perfect time to build a new house. As always, it is essential to conduct thorough research, assess your financial situation, and consult with a knowledgeable professionals such as mortgage brokers and a Bennett Homes new home consultant to assist you with an informed decision that aligns with your goals and circumstances.