Expert Warns Panic Buying Could Lead To Property Pitfall
CEO of Positive Real Estate New Zealand and avid property investor, Sue Irons says, Kiwis need to be cautious of buyer’s remorse amid today’s panic buying environment.
This comes after a recent online promotion in June, held by a Canterbury developer who gave prospective buyers the chance to reserve one of 116 sections in the town of Rolleston with a $1000 down payment.
The sections which were priced competitively, saw a flurry of attention which resulted in the website crashing and a group of frustrated wanna-be-buyers frozen out of the offer.
VIGILANCE REQUIRED AROUND FEAR-BASED MARKETING
While Sue says this type of ‘promotion’ is not unheard of, she urges potential buyers to think carefully about purchasing property in this manner.
“I can see why the website crashed and why people were angry when they missed out. Are we going to see more of this type of thing? I think so. It does concern me a little bit. I’m not saying there’s anything wrong with a marketing strategy that gets people in the door and creates demand, but not everybody is as astute and well-advised,” she says.
With the marketing tactic based around fear of missing out, it taps into the ever-growing scarcity-based mentality that’s already prevalent across the New Zealand property market. And while this might be the perfect ingredient for those selling, Sue says those who are desperate to buy, may be at risk of making unnecessary mistakes if they don’t proceed with caution.
“People rush to put a deposit down, not realising the commitment they’ve made without even securing finance,” she says.
DESPERATION LEADS TO DISASTER
The other issue is that people often seek advice out of desperation from the wrong people which again, can lead to disaster.
“For those that are less educated and don’t get the right advice, there’s going to be some tears here.”
However, the alternative is not to be frozen by fear. With the reality of property prices still rising, and demand only getting higher you clearly still do have to be in it to win it. Sue says by mapping out a solid investment strategy first, you’re unlikely to make some of the fatal mistakes that occur when people rush to the market.
“Surround yourself with the right team so you can feel confident in your purchasing decisions,” the property guru urges.
PLAN AND THEN CONQUER
“Experts are experts for a reason. They bring a wealth of experience and knowledge that will help immensely when it comes to making a big financial decision like property investment.”
Of course, Sue adds you should always do your own due diligence. You should know your numbers, your lending, your insurance, your market knowledge, and how it all fits in with your overall investment strategy.
However, building the right team around you – particularly with professionals who have investment experience themselves – will ensure you are buying smarter, not harder.
Who are the right people to talk to? An accountant, a financial planner, a buyer’s agent, a conveyancer or solicitor, and a mortgage broker will all be able to make the process a whole lot simpler and easier for you.
While this probably sounds like a hefty additional expense you’ll have to bear, solid financial recommendations will likely save you more long-term by minimising costly mistakes.
Our free property investment seminars will help get you started on your investment journey by sharing the best tips and resources to make well-informed, smart decisions.
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CEO – Positive Real Estate NZ