Property prices: Is this the turning point?

Wellington house prices have increased for the first time in over 17 months according to property analysts CoreLogic, whose latest House Price Index showed Wellington prices crept up by 0.3 per cent in July compared to a month earlier.

It's the first time since March last year that the Capital's house prices have increased from one month to the next, although the rise is small. That takes Wellington's average house price to $892,906.

Of course, this doesn't mean things are about to 'boom' again, or that anything dramatic is happening... but it does, perhaps, suggest that the tides are turning.

That sentiment is shared by many real estate agents, who have reported seeing a major uptake in interest at open homes, and the return of 'FOMO' (fear of missing out), according to independent economist Tony Alexander. His analysis shows first home buyers steadily being the driving force in the market, with investors rearing their heads for the first time in a long while too. That’s in line with what I’ve been seeing as a mortgage adviser.

Couple that with the potential for a change in government and the legislative changes that could bring, there's a general consensus that investors could re-enter the market en masse in the new year.

So - if the numbers are to be believed and the market has genuinely turned a page, coupled with the return of FOMO and potentially more favourable terms for investors, what does it mean for you? And what does it mean for your mortgage?

If you're a first home buyer, then I'd suggest the sooner you act, the better. There's certainly no longer any data to support the idea that waiting is going to make things easier for you.

If you're pondering selling and upsizing (or downsizing), then you'll now have a better chance of selling your home, with more buyers in the market.

And if you're a property investor, whilst it would be dangerous to pull the trigger too soon, you'd definitely want to have all your ducks in a row so, when the time comes, you can if you want to - that may mean obtaining a pre-approval for a mortgage now (remember most bank pre-approvals for finance last three months).

For mortgage holders, a rebound of the property market doesn't mean interest rates will trend downwards. Current rates should be factored into any future decision making, to ensure lending is affordable for you. There are SO many factors at play affecting interest rates, most of which seem to be completely unpredictable for economists, so as always I suggest focusing on your personal plans for the future and structuring/refixing your mortgage with that in mind, rather than simply focusing on interest rates.

If you’d like help with obtaining a new mortgage, or maintaining your existing one, just reach out - I’d be happy to help.

Note this article is not intended as personalised advice, and should not be acted upon without seeking independent personalised financial advice from a qualified professional.