With Christmas holidays looming, many people will be heading to holiday destinations and may experience the annual urge to move permanently to their favourite summer spot.
Despite the pandemic a number of our clients have successfully sold their property in Auckland and have moved elsewhere in New Zealand. We can learn a number of good tips from them, and some of these come down to the incredible rise in house prices, especially, though not exclusively in Auckland. In the past few months we’ve witnessed even scrappy bungalows fetching stratospheric prices and it must be unnerving to sell while the prices go up several notches in a single week. Should I reap another $100,000 and delay the sale for another month? Should I hang on to my Auckland property and buy elsewhere with a fresh mortgage?
The best approach is to take a broader view. Moving house is not just about realising maximum capital gains. There are actually several considerations.
- Your motivation to move house. Is it a lifestyle shift that goes somewhat casually hand in hand with your retirement plans? Is it prompted by the attraction of a retirement village for the community living and simpler lifestyle? Is the move to release money, so you can enjoy more spending? Or is the shift prompted by unexpected family considerations such as looking after a sick or elderly parent? Some reasons for the move are more urgent than others. Just a little pointer - don’t follow your children as there’s a likelihood that they might move. For peace of mind, stick to your own goals and plans.
- The relativity of house prices. Auckland prices are still soaring but it makes no sense to put off selling your house if prices are growing even faster at the place you intend to live. For example year-on-year median house prices grew by 25% in Auckland inthe 12 months ending this November. That’s about on par with Bay of Plenty (24%) and the Waikato (24%) but trails the growth rates of Hawke’s Bay (38%) and Taranaki and Canterbury where median prices gained 31% over the same period. If prices are rising faster at your intended destination, then it might pay to market your Auckland home sooner rather than later.
- New options. The pandemic has certainly increased the amount of activity that can be done online. It is not uncommon now to leave the rat race and work remotely or operate a business in a place of your choosing. Home can be anywhere.
- Building in a time buffer. Don’t let moving house threaten other deadlines you may have. While you may have plans to move, there may still be an employment contract that has months to run. One of our clients wanted to shift to a new location but they wished to delay the shift until after their son completed high school. At the same time they found a house that they really wanted. In this scenario, they were able to negotiate settlement dates that suited them - both on the sale of their own home and the purchase of their new one. Another client was able to rent out their new place back to the owner for a fixed period: a strategy that gives you time.
- Don’t forget to check the property you wish to buy. During lockdown properties were being purchased, sight unseen, by anxious buyers. This is a risky move. Structural issues, damp or leaky conditions or neighbours from hell: don’t expect the vendor or their agent to tell you about these potential nightmares. Do your homework.
As always, if you are making the move, consider renting first to trial out life in another community. Do not underestimate the social network you have built up particularly if you have lived a very long time in one place. This can be a regret for those who have had to work hard to start new friendships.
.png)
