Are you thinking of buying a house in Wellington?
I got out of the UK property market in June 2005. Probably a quite a way short of the peak price for 1 bedroom garden flats in south east London, but I wasn’t comfortable with the way the economy was going at that time, the flat needed maintenance, and I didn’t want to have to think about potentially selling the property at a loss when in NZ. Property prices were grossly inflated compared to wages as far as I could see when I came to NZ. So, I decided to sit it out on the sidelines and rent here too while things took their course.
We know that prices have gone down in the UK - though there are big regional differences. Prices have also gone down a little in NZ, again with big regional differences - Wellington hasn’t dropped as much as other regions. Although I’m tempted to get into the housing market from an emotionally driven point of view, my more rational reading of the current situation is that we are not anywhere near the bottom of the economic cycle just yet. I think we are in a slump, but we’re still at the start of it, on the way down. As Warren Buffet said on the news last night, who knows whether it will last 6 months or 2 years, but it’s going to get worse, and significantly so.
So, I’m still sitting out on the sidelines for a while yet and I’m going to try to force myself to remain out too. For the forseeable.
