The heat is on. Interest rates have tumbled and we're told it's the time to buy. Are you gearing towards another home, or investment purchase? You need to know the full financial facts....
The Current Climate
Apparently it's the time to buy, and while most of us can't afford the modernist glory of Fallingwater, Lloyd Wright's signature Modernist domicile, many are trawling the TradeMe and Real Estate sections with a view to expand the property portfolio.
In 2016 the banks finally dropped interest rates and began a concerted attempt to reignite the flailing market. Property development had slowed markedly and the ever inflating prices in Auckland housing impacted on the average income earner's ability to obtain affordable, reasonable housing.
Reduced Interest Rates
These are now pitched at around 4%, meaning for many, the possibility of purchase is on the table again. There's good opportunity out there, and Kiwis have finally cottoned on to affordable townhouse and apartment options, both as investment or first home purchases. These dwelling types came to the fore in Australia in the 1980's and have, until relatively recently, been slow to take hold on New Zealand soil.
They actually offer a good, viable alternative to standard free standard dwellings and will likely lose the stigma of "attached dwelling" status, with time. This model of housing is par for the course in Australian capital city centres of Melbourne, Sydney and Brisbane where developers have fully utilised space constraints to create luxury and up-market townhouse precincts with shared pool, tennis court and gym facilities.
The Right Advice
Make sure you receive the right advice. It's important you seek out a qualified chartered accountant with a sound track record of advising people on property matters. Brett Slater from Slater Chartered Accountants says it's important to receive holistic advice that embraces your complete financial picture. Be fully aware so you're able to contend with any future interest rate rises before making the decision to purchase.
Armed with the right information that takes into consideration family income and expenditures, tax breaks and extraneous issues will enable you to secure a property with the full knowledge you will be able to absorb the shock when the rates eventually rise.
This is another important factor. Slater Chartered Accountants has a great list of very favourable local and regional lenders and banks who know the regional market. Make sure you shop around and again, ask your chartered accountant. They may be able to help you understand terms and conditions and fine print. And remember, Slater Chartered Accountants offers free appointments to clients 5 days a week.
This means you can come in and talk about your property plans or purchase/contract with Brett, without having to pay dearly for it! There's nothing worse than receiving a bill for that chummy appointment after the event! That doesn't happen at Slaters. It's free. Forever.
So if you're thinking about purchasing a property soon, be well prepared, and most importantly, make sure you have an accessible and available chartered accountant who can steer you on course with plenty of financial room to move.
Have a great day.