The experts say that now is the right time to buy a house:
No one should try to pinpoint the bottom of the housing market and if the price is right, the timing is perfect, says BNZ chief economist Tony Alexander.
His call sits uncomfortably with talk of recession and the worsening international outlook, but it is based on sound judgment.
“As long as I figured on keeping my job I would be out there actively looking for a property at the moment,” Mr Alexander said.
“I wouldn’t be hanging off simply trying to pick the low point in the house-price cycle.”
Economists had proved they could not pick the top of the cycle, so no one should expect them to pick the low point, he warned.
He believes real estate sales have probably almost reached their weakest level, and activity is likely to fluctuate and start moving up before the end of the year.
As it happens I have just bought a house, although now I know I’ve inadvertantly followed Tony Alexander’s advice I do wonder if I’ve made a horrible mistake.
It’ll be interesting to see what happens with all the half finished housing developments around the country – there’s one near my current house called ‘Boundary‘, located deep in the savage, Graeme Edgeler-haunted wastelands of South Karori. They’ve originally planned to build thirty or forty townhouses on the site but it looks like less than a dozen or so are finished and the rest look like they’re in the same stage of construction as they were when I went on holiday a month ago.
I sometimes pass by the Boundary site on my morning run, and you can see the owners of the completed units standing in their gardens gazing dubiously over the empty, unfinished lots and the tennis court covered in mud. According to the web site the townhouses are priced at up to $560, 000 – for the same price you can now buy a refurbished north facing 1920’s villa with 3 bedrooms and a garage in central Karori. It must be like Glengarry Glen Ross down there at the real estate agents.
On my recent tramping trip I ran into a builder from Whangarei who told me that there are hundreds of sites like this all over the country – and also that there are a number of lodges, mansions and high-country luxury developments in the South Island that have been abandoned after the November crash and are now empty except for the caretakers. (Now there’s a great job in these troubled times! Overlook Hotel, anyone?)
I suspect the market will keep plunging as places nobody wants to buy (palaces in Fiordland, half-million dollar townhouses in South Karori) depreciate in value. And if you’ve ever daydreamed about starting up your own religious cult (and haven’t we all) now is definitely the time to start looking. Boundary could easily be turned into a heavily fortified compound and it has great open spaces for prayer meetings and mass suicides.