See our latest thoughts on the market information being reported that is on our radar.
There’s no doubt about it the property buyers market in our region is still very much alive and well. Despite the figures indicating an increase in values compared to the rest of the country, in real terms the values are still down on what they were in the post covid peak. Prices are pretty flat. There are headlines out there in the media like “Buyer’s still hold the power”.
Don’t get me wrong though, great properties still sell well. Time on the market is definitely up and there is undoubtedly still an abundance of caution out there. Sales volumes are much lower than predicted for this year. The inventory of properties listed definitely impacts on the predominance of control by buyers.
The headwinds relate to the global economy, not just the national situation and interest rates, albeit lower than what they’re forecast to become. Election year always makes for a subdued situation in the markets.
Factors influencing buyers confidence also relate to job insecurity and concerns relating to weak population growth. I see this with buyers in Wellington trying to sell to move south.
Agents are reporting that buyers are demonstrating preparedness to walk away rather than negotiate more than they have seen previously. The FOMO factor not being in play during this phase of the market.
As is often the case for me in a buyers market, I have many more would be vendors contacting me with an opportunity to capture a pre market opportunity. Yes, sometimes these opportunities could come at a premium, but depending on the property there is no telling what impact some purchasers will have during a competitive process purchase process. There are a significant number of vendors demonstrating to me that they want to sell and would engage with a buyer.
A significant amount of recent market commentary indicates that the decades of housing price cycles driving the values are up are not to be anticipated in the future. Prices in our region have doubled over this past decade. This will impact the number of investors coming to the market.
Overseas investors in the Golden Visa or AIP programme are trickling through, but this is not as quickly as was initially anticipated. These buyers are rightly cautious and need to be looked after to ensure that they are not taken advantage of. They have a FOOP – fear of overpaying and rightly so. I have worked with some who are not seeing a relevant cross section of what is available and where the most relevant areas for their demographic would be living as New Zealanders. It remains to be seen what impact the election result could have on this population of buyers.
I have noticed strong enquiry from Australian buyers following the tax changes announced recently in the federal budget. The exchange rates are also significantly in favour of Australians currently.
Building costs are also proving to be a barrier for those wanting to build. There is still inflationary pressure on materials making this for some seen to be a step too far on their risk barometer.
I believe that interest rates will have the most significant impact on the state of our markets in the near future.
Timing of being active in the market is not always necessarily about price though. Some properties are absolute box tickers and will always be popular. Getting the RIGHT property is always in my eyes the most important factor. You never want to overpay, but often missing out is the worse side of the equation to be on. A property with a fantastic aspect, superlative floor plan and prime location will always be worth grabbing. There is still evidence of high demand for those gems. That’s where being in the know, swift on your feet and having the right tools in the toolbox is imperative.