Timing is everything. Is this a good time to buy?

The old saying of “Timing is everything” certainly applies to Real Estate. Consider the following:

The supply of property in Northland currently outweighs demand. When this situation occurs Buyers have the luxury of increased choice.  This state of the market usually sees Sellers entering into keener negotiations as they look to change their circumstances. This has been reflected over the past couple of years in some lower than usual land price sales. There are signs that this situation might not last too much longer.

With the rebuild of Christchurch in the aftermath of the earth quakes, (this is reportedly around 10,000 homes that need to be rebuilt) expected to happen in 2012, coupled with an increasing demand in Auckland for housing, price increases in new builds seems inevitable. Given that Christchurch will absorb a huge quantity of material and labour, there is likely to be a shortage in the North. Shortages usually lead to price increases.

One can see a change happening where supply and demand for property becomes more balanced, this is starting now and will continue to occur in the later part of 2011, through to early 2012.

The Reserve bank has just announced another “no change “to the official cash rate of 2.5%. Banks are lending money to purchase property at around 6%. Floating Rates are under this at 5.75% and fixed rates for 3 years are still under 7%. These rates are low in comparison to what we have seen over the last 30 years.

The Reserve Bank is signalling “no change” for the next 6 months and then perhaps rises in the first half of 2012.The Westpac bank are “looking for reasons to lend money” to purchasers not reasons “ not to lend”.

Property in Northland N.Z is at the lowest level for at least 6 years.  Given the above evidence it would seem that now is a pretty good time to purchase property.