Does COVID-19 make right now a terrible time to buy a home?

If you take a quick look at any of the country's major news sites, you'll likely find a handful of articles written by economists predicting what might happen to New Zealand's property market. 

All of them will differ wildly with their predictions - some saying nothing will change on the housing front, others predicting the biggest housing market crash we've ever seen. It's hard to know what to believe and, if you're in the market for property, it’s hard to know what to do.

The truth is, no one has a crystal ball. The true effects of COVID-19 won't be known for months to come. In the meantime, all we can do is consider what's happening in the property market right now. 

My advice: Live in the now, because today's market is the only one that matters.

We’re still seeing plenty of people buying, selling and in the market for property - and properties certainly aren't selling at bargain prices. In fact, prices are showing no signs of dropping any time soon, with competition in the market (particularly in Wellington) still strong. 

If you’re buying a family home then chances are you're not buying it to make quick gains and sell tomorrow, or in six months. In that case, today's price is the one that matters - regardless of whether that number is up or down compared to yesterday or last month. 

If you aren’t looking to buy and then sell again in the near future, don’t let yourself worry about what might or might not happen to property prices in the short-term. What will matter is what property prices are doing when you go to sell in five, 10 or 15 years (or even longer, in some cases).

If there's one thing COVID-19 has taught us, it's that things can change overnight, and no one knows what will happen in the coming days, weeks or months. If you're sitting around waiting to see what happens, you could be waiting for quite a while.

With many Kiwis facing an uncertain financial future in the coming months, it’s likely we will see fewer buyers in the market. With demand, particularly in Wellington, having been sky-high for so long, this is good news for those who have been struggling to buy or who may have been scared off by fierce competition in the past.

While the number of homes for sale might climb in places like Queenstown, with holiday rentals and Airbnb properties potentially flooding the market, we wouldn’t expect to see something similar in Wellington. The bar for Wellington had been set so high for the last few years - with demand for properties far outstripping the number of homes on the market - even with a dip in the number of potential buyers, there still won’t be enough homes to go around.

In short, if you’re fortunate enough to still be in a position to purchase a home, right now could be the perfect time to get on the ladder.

If you’d like to explore your options, get in touch with your Orange Network adviser. We’ll work with you to understand what you're after and help to get you pre-approved for a home loan that works best for you.