If LVR rules were restricting you, ie you didn’t have enough cash or equity to use for a deposit, you now have more options.
Factors working in your favour right now if you are thinking about property investment:
- LVR restrictions have been lifted by the Reserve Bank and some banks have started to react (including Kiwibank, ANZ, ASB, BNZ) by allowing investors to use 20% deposits instead of 30%.
- Property prices are flat and many economists are predicting declines in values leaving those selling their property to expect lower offers.
- Many buyers have been forced out of the market because of income uncertainty making it much harder for them to obtain finance.
- Property developers require more pre-sales because of uncertainty. Many have started pre-Covid-19 and want to reduce their risk by selling at lower prices if they have to.
- Information and education about how to get a good investment have never been as available.
With record low-interest rates and the hope they will continue to fall, property investors are doing their sums and seeing good deals everywhere. As the property market has experienced some stalls and continues to experience uncertainty, investors with home equity and secure incomes can pick up properties at prices that allow for higher yields than recently seen in 2017-2019.
Those people who are selling are often in a position where they have to sell. Who would sell during a recessionary period? People who are forced to.
When considering what to buy and where, and how much to spend, you should try to learn from the past what is likely to happen again if we do hit recessionary or a ‘down cycle’ in the property market over the next few quarters.
You should understand your borrowing power before starting your property investment homework which you can do through the mortgage snapshot. Then learn more about; land banking, subdivision, building up your equity, new builds, house hacking, home and income, do-ups, investing regionally, minor dwellings, flipping/trading property, apartments vs suburbs… there are many different types of property investing and so much free info on YouTube and in books and podcasts. Check out some of our videos here and if you’re interested in investing with solid fundamentals register for the property course – Property Formula Workshop.