The Perfect Property Storm
Soaring land prices, escalating raw material costs and construction firms scrapping fixed-price builds… there’s plenty of doom and gloom in the media, but there’s also plenty to be excited about, says Nathan Miglani, Mortgage Adviser with Loan Market Paramount .
It’s a perfect property storm… critical shortages of materials are resulting in escalating prices which are deterring construction firms from fixing their build prices. Clients in the industry tell us that the price of timber is going up as much as 20 per cent, while the price of steel is going up by as much as 40 per cent!
Naturally banks favour fixed-price builds so, for some, getting a mortgage is proving harder than ever before and the concept of a new build feels like nothing more than a pipe dream for many. But it doesn’t have to be. Banks love lending on new builds, even if it’s your first home. In fact, first home buyers can still secure a new build with just a 10 per cent deposit.
Property investors can still offset the interest for new-build lending, as opposed to interest on loans for existing dwellings, which is no longer deductible after changes came into play earlier this year. And we’re still finding construction firms are willing to do fixed-price homes too, so it’s not all doom and gloom like we’ve been led to believe.
There’s a record number of homes being built right now with more than $1 billion worth of new housing approved in greater Christchurch already this year! Council consent data from Statistics NZ shows more than 3,000 new Christchurch homes were approved in the past year, while Selwyn approved about 1,800 and Waimakariri about 740.
Every bank has different lending criteria for construction finance, so in uncertain times like these, it’s more important than ever to talk to a mortgage broker. Our team specialise in construction finance in Canterbury, so we are well placed to help secure a loan for your new build, but we’re also increasingly helping our clients to secure finance for extensions and alterations. With the heat still very much in the wider Canterbury property market, a lot of people are choosing to stay put for longer, reinvesting in their existing properties.
We’re also starting to see people thinking outside the square in the pursuit of making it onto the property ladder – geographically speaking. Suburbs on the city’s outskirts, such as Halswell, Prebbleton, Wigram, Templeton, Lincoln and Rolleston can’t seem to build homes fast enough and now it seems we’re casting our net even wider.
No matter the ‘where’ or the ‘when’, a mortgage broker can help you with the ‘how’, showing you just what is possible and how you can get there.
Years of experience mean Nathan Miglani knows how to give you the best possible chance of success if you are thinking of buying or building a property. Whether it’s a first home, next home, rental or a development, Nathan and his team are passionate about helping you through the process and they’ll find the best deal for your unique circumstances.
