When you're in the thick of a crisis, worried about what will happen to your financial future, is not the time to be making big decisions. You'll often make the wrong decision out of fear.
Over 2020 we saw emotional buying reach a new fever pitch.
Defying predictions from economists, housing slowed briefly over lockdown and then roared back to life as New Zealand's economy got back on its feet.
Now mortgage brokers are warning they're having to put longer finance clauses in sales agreements, as banks struggle to process the number of mortgage applications they're receiving.
Stories abound of buyers, frustrated at constantly missing out, offering well over already-steep asking prices.
I saw an example in my own neighbourhood recently.
A house that had been the well-known trouble-maker was listed for sale. Before the listing, the tenants were kicked out, ending the stream of cars that visited at odd hours in the day.
Windows that had been smashed and left empty for over a year were suddenly repaired.
Out of interest I headed along to the open home. Part of me wanted confirmation of the illegal activities everyone suspected were happening there, and part of me wanted to know just how much the real estate agent thought they would get for a house I believed was chemically contaminated.
On stepping inside the front door, my already low expectations fell even further.
Significant water damage was seeping through the lounge ceiling. When asked whether the sparkling, damaged ceiling contained asbestos, the agent shrugged and said we were welcome to have it tested.
Piles of tires were in several rooms, and an abandoned motorbike in a bedroom.
A room filled with police scanners and an air rifle also contained a doorway into the roof cavity. The attic space was carpeted, with plenty of electrical outlets, and lights. It was directly above the water damaged ceiling I'd spotted downstairs.
"Hmm," I thought.
At auction that week it sold for more than the price indication the real estate agent had given me.
The problem is that the spiralling house prices have to end at some point.
Wages aren't keeping up with the prices. Interest rates on mortgages may be rock bottom now, but the only place they can go from here is up, and banks are signaling that may only be a year away.
The Government, trying to please everyone, has said that house prices should increase, but at a smaller rate.
There are hints at a "bold" housing plan in May's Budget, but with politicians you should always wait to see what the plan actually is before giving any credit.
Prices that rocket up too quickly often end up falling again, if they're propped up by little more than emotion. Just ask GameStop investors.
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