Should I Invest in the Auckland Property Market?

By Michael Mackinven | Uncategorized

Oct 13

Should I Invest in the Auckland Property Market?

We get this question a lot and always answer, "IT DEPENDS".

You must consider your financial situation, your mind-set, your family and business commitments and your risk appetite. You need to both make money and keep safe. But often the answer will be YES. 

There are 5 different scenarios below, which one are you?

5 scenarios for buying in the Auckland property market

1. You have finance approved and can purchase a property in Auckland but only up to say $650,000

  • SOLUTION:
  • There are many amazing opportunities in the Auckland property market right now and our students are taking advantage of those.  

  • Beware as always of slickly marketed investment properties that include guaranteed rents, negative gearing tax breaks and other "too good to be true" promises.  

  • Apartments can be good but again be aware that there are plenty of Auckland properties in good areas with over 600sqm sections, large 3 bedroom homes and garages for less than $650k.  It’s a buyers’ market so get to know the market and your alternatives.

  • 2. I can only get finance to purchase up to say $350,000

    • SOLUTION:
    • You have three options:
    1. Keep saving and increasing your income until you can get into the Auckland property market. Consider alternative investments such as equity markets until you have saved your deposit.
    2. Purchase a property in a provincial city.
    3.Get educated about how you might be able to get into the Auckland property market with a very small deposit right now.
    5 scenarios for buying in the Auckland property market

    3. I don't have enough deposit or enough income to purchase a property anywhere

  • SOLUTION:
  • Increase your income by becoming more valuable
  • Decrease your expenses
  • Make a budget and stick to it
  • Save, save, save
  • Get educated - your dream might be able to be realised sooner than you think

  • 4.  I am able to buy but I'm concerned that the Auckland property market is going to crash

    1. SOLUTION:
    2. How many times have we heard this? Yes there is a risk that we will see a correction within the next several years but if you think this way you might never purchase a property.  
    3. If you purchase for the long term and you are able to withstand higher interest costs then there will never be a better time than RIGHT NOW.
    5 scenarios for buying in the Auckland property market

    5. I'm waiting for the Auckland market to crash then I will buy

    1. SOLUTION:
    2. You might be waiting a long time.
    3. Even if you are right about a crash, then unfortunately the banks will be unwilling to lend except to the strongest investors - remember that's what a crash is, "A rush for cash". 
    4. You're also waiting for the media to be talking doom and gloom which will further put you off. And your gambling that the crash will be significant enough to make it worth waiting for.
    5. What happens if the market goes up another 5% then falls by 5%. Was it worth waiting for?

    Final thoughts

  • As investors we have to manage the twin emotions of FEAR and GREED.

  • Fear will prevent us from doing anything and greed will send us broke. We must eliminate the power of these emotions over our psyche.

  • If you have the ability and the desire, you absolutely should be purchasing in Auckland, right now.

  • Please be inspired to grow your thinking and move outside your comfort zone to achieve your property investment dreams.

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    About the Author

    I have been a property investor for over 13 years and have created a multi-million dollar portfolio including residential and commercial. I could go on about this but I’m not here to impress you but to impress upon you that YOU TOO can create wealth through property whether that be $100K or $5 million. I've been through the boom - bust - boom so I know what it takes to stay in the market. I live locally in Otahuhu with my wife and new baby boy. I love to help and teach people about buying well and for long term. We can all make a quick buck but the real strategy is creating long term wealth.