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Is now a good time to invest in a property?

28-May-2020 11:07:09

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Everyone loves to talk, debate, and most often speculate on the current and future direction of the real estate market, nobody more so than an engaged property investor and never more so than right now!

During turbulent times, the naysayers always come out crying "the sky is falling", or words to that effect, in regard to price prospects, creating angst amongst those less experienced or more financially exposed.

My suggestion is to look at the facts as they relate to property and its performance over history and during challenging periods.

Put simply, most property owners, investors and owner occupiers do not buy property on a whim, they buy for long term investment or to provide a home for themselves and their families. Short term fluctuations in "value" really have no impact and, based on history, any impact from the negative events we currently face is likely to be just that – short term. Take a look at the graphs from the Canterbury earthquakes and the Global Financial Crisis as the most recent and relevant reference points.

The other significant "fact" right now is the low mortgage interest rates we enjoy. Yes, there are significant financial challenges for many due to the economic impact of COVID-19, but with interest rates at 3% or below, holding costs through these challenging times are lower than any other time in our history. Low mortgage interest rates will help many to avoid pressured sales and equally they will assist buyers to continue their acquisition plans.

Our market, in almost every location, continues to see an excess of demand when compared to new stock coming forward. Good opportunities exist for sellers right now, and for buyers you, as always, need to be prepared and ready to act. The property of the year comes along almost every day.

Regardless of your position in the market, it would be difficult to find a better investment right now than New Zealand real estate - but then I am a real estate agent!

Bryan Thomson
Harcourts Managing Director

This article is featured in Harcourts' Property Management Focus Newsletter Issue 5, 2020

Topics: Property Management, Investment Property, property sales, COVID-19