The question of whether it’ll get easier to buy your first house is one that I’m asking myself after a recent email from a client. In it, they said that they wanted to wait another 12 months before they bought a house.

They reckon it’ll get easier to buy one because they “see the effects of foreign buyer ban, negative gearing changes and all the new houses/apartments coming on stream” adding up to a situation where there is more supply of and lower demand for houses. And, they think it’ll be easier to buy their first house if all these things pan out.

While I understand their reasoning, frankly, I think they’re crazy to wait.

Let me tell you a couple of quick stories to explain why…

The first story goes back to August 2013. I recall talking to a couple who were of modest means and interested in getting into a little unit in Te Atatu. First home buyers are often hesitant, that’s a very natural feeling, and these guys were no different.

The place was worth $329,000 and, while it felt like a stretch to them, on paper it was quite doable. I still have their email on file and it reads “[we] are thinking maybe we should hold off on the whole house-buying process at least for a few months; we just feel, and we’ve been speaking to a lot of people about it, that something is about to happen and this is the very worst time to buy.”

They were dead right about something about to happen. It was quite big, actually – because the LVR restrictions came in just a few months later. Any chance this couple had of borrowing with their small deposit evaporated.

And then during the years that followed (2014 – 2016) two-year fixed interest rates fell about 1.5% helping to fuel a property boom. That little unit in Te Atatu went from being ‘a stretch’ to being ‘forget about it’.

In all honesty, their best chance of owning a house now is by way of an inheritance.

The second story is about a close friend of mine. He did what the above customer feared the most because he actually did buy a house at the very worst time. It was May 2008 and the GFC was starting to bite. I reckon the value of his home had dropped 10% within about 6 months. He then had the misfortune of being made redundant!

As you can imagine he was thinking about selling before being forced into it. But doing that would have crystallised a 15% loss which he wasn’t keen on either!

Thankfully, the friend he spoke to most about his predicament was also a financial adviser (me). I like to think that I gave him the courage to move back in with his mother, put a tenant in the property and wait it out.  It was a tough time in his life because he had to give up his home and he had no job.

Fast forward 10 years and his property is now worth $500,000 more than he paid for it. It’s been like winning Lotto, albeit slowly.

So, what’s the moral of the story? There are several:

  • The best time to buy a property is yesterday
  • The best thing to do with property is hang on to it for the long haul
  • Friends and family always mean well, but their financial advice is usually terrible (unless they’re actually qualified in the industry – like me!)

Thirteen years of experience tells me that if you are capable of buying a property and deep-down you really want to, then take a long-term view and just bloody get on with it.

Don’t let the opportunity pass you by – give me a call and get some realistic advice on how to get into the market today.

About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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