The upside of upgrading in a buyer's market
If you’ve been thinking about upgrading – now might be a great time.
13 May 2019
Pockets of the Kiwi housing market are seeing subdued pricing and reduced investor competition – creating favourable conditions for buyers.
These market conditions could provide the perfect opportunity to upgrade for less.
Crunching the numbers
With a cooling market, your property value may decrease. However, you’re not alone. A 10% drop in property values may mean savings if you want to buy up in the same market.
If your ideal sale price is $500,000 but you only get offers of $450,000, selling and upgrading could still be worthwhile if you negotiate the right price point on your next purchase.
For example, if the house you want to buy is on the market for $800,000, its selling price may be closer to $720,000. Factoring in a 10% drop in value on both property transactions could see you ahead by around $30,000.
It’s also worth keeping in mind that for many who have owned their property for some time the price could already have appreciated, reducing the impact of any recent price corrections.
To make the most of this opportunity, you may want to consider pre-approval on your finance.
Think carefully about buying before you sell. This can put unnecessary pressure on you to accept a lower price for your property than intended.
Having your finances in order is a big advantage when it comes to negotiating the purchase of a new home. With a wealth of experience, a Mike Pero Adviser can help finance your next move up.