Once again, at the start of another calendar year many buyers are asking for real estate market predictions. For some who have delayed buying and watched prices continue to rise, it is a question of timing. Do they buy now or wait in the hope that prices might fall?

My standard advice on real estate markets, no matter what the market is doing, is: There’s never a better time to buy than now. Ideally, buying property, especially investment property, should not be a short-term move. The best financial results are usually attained when property is held long-term, especially considering the tax liabilities incurred if a property that is not your primary residence is sold within five years of purchase.

In any case, the indications are, barring international financial calamity, residential house prices in Dunedin are unlikely to fall any time soon. If history is an indication, the Dunedin market does not “crash” when a period of rising prices ends, it merely tapers off and levels out. So those who are waiting for an “adjustment” are likely to be disappointed. We are just over four years into a rising cycle, one that has consistently hit double-digit annual growth. Previous cycles, going back at least 50 years, have lasted up to seven years. And remember, Dunedin is coming off an almost nine-year period of flat prices, from the start of 2007 to the end of 2015.

Note other factors involved in housing prices also point to a continued rising Dunedin market. Supply continues to be short with, at time of writing at the end of January, fewer than 200 listings on the Dunedin market. Demand continues to outstrip supply, especially in the first home buyer range of up to low $500,000s. And interest rates, always a factor, especially when they are low, continue to hover well under 5%. While floating rates are a little over 5% (ANZ is at 5.19%, Kiwibank at 5.15%), special fixed term rates can be accessed at just over 3.5% (Kiwibank offers a special rate of 3.55% for two years). Note there can be additional percentages added if you don’t have a 20% deposit or more. Best advice: engage a mortgage broker to work for you. Remember their help is free.

Those who regret not buying earlier should bear in mind that Dunedin is still ranked, according to a recent international affordability study, fourth most affordable city in New Zealand compared with median household income. Dunedin ranks behind only Christchurch, Palmerston North and Wellington.  See the following article. (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12301144).

For those many buyers waiting to move, let’s hope predictions of a surge in Dunedin listing numbers proves correct. Personally, I believe the lack of listing numbers will be with us a while yet as those wanting to move up, downsize or move within the city for other reasons feel held back by the lack of choice. On top of that, we can expect an influx of out of town buyers this time of year, many of whom will still feel the Dunedin market represents excellent value and are willing to outbid local buyers. So if you find that near-perfect property and are in competition, my advice is dig deep and offer the best money you can.