There is a huge amount of uncertainty from buyers at the moment, so I thought it would be a good idea to remind readers about the reasons why you should buy now instead of waiting for prices to fall.

1. The number of listings for sale across New Zealand are well below average (51% down) when compared to the 10 year average, which means that supply is reduced. Yes, we are experiencing a building boom, but after decades of not building enough to keep up with population growth, we are still playing catch up. High demand + limited supply = price increases.

2. It has been announced that new builds are exempt from the 10 year bright-line (five year bright-line still applies) and that they will also be exempt from the removal of interest deductibility, for an as yet unknown period of time. This is likely to further increase the demand for new builds, pushing prices up further. Be warned: new builds are often a worse investment than existing properties, as they tend to have lower rent returns (even though you can deduct the interest on the mortgage) which means the cash flow is often lower than the after-tax cash flow on an existing property. So, don’t believe everything you hear from someone who is trying to sell you a new build. Do your own homework, and speak to an independent financial adviser (someone who has no vested financial interest in any property you buy) who understands property investment, like me.

3. When the borders reopen, we are likely to see population growth start climbing again, meaning that demand for housing will increase further.

4. We have a reduced supply of building products causing the cost of construction to increase, which in turn will result in developers increasing their prices, which also tends to result in an increase in existing property values.

5. We have a travel bubble with Australia, which is also experiencing a building boom. Tradies generally earn more money there than here, so there is highly likely to be a number of young tradespeople who will look to move to Australia to make the most of that. This puts further constraints on our ability to increase housing supply.

6. Longer-term interest rates are starting to rise, but short-term interest rates are still very low, which means that it is still very cheap to borrow money (eg the average interest rate in 2015 was 5.6%, and we all thought THAT was cheap). If you delay your purchase now, and miss out on the ability to lock in rates while they are low, you might regret that decision in a few years.

7. There are now approximately 10,000 less property investors than there were in 2015 (a drop of approximately 8%), and home ownership has been decreasing since the 1990s which means more people are renting now than ever before. Rising demand for rental property and reducing supply = market rent increases.

8. Investors have the ability to use equity rather than savings to help them to purchase a rental property. As an investor, you will not find a bank that would be prepared to lend you money to invest in the share market, but as long as you meet bank lending criteria they will gladly lend you money to buy an investment property.

9. A lot of people are “waiting to see what happens” instead of buying now. There are less people turning up to auctions and open homes, and less multi-offer situations almost right across the country. It won’t be long before these people realise that they have made a mistake, and re-enter the market.

10. Have I mentioned that it is unlikely that property is going to get cheaper, and rents are increasing?!

Don’t miss this window of opportunity – just remember that not all properties are good investments, and there is no such thing as “one size fits all” when it comes to property investment.

Property Apprentice is 100% NZ owned and operated, and is NZ’s leading property and real estate investment coaching program. With their lifetime coaching support program, and no vested financial interest in any property you purchase, they are there to help you to reach your property investment goals.