From a buyers perspective Wanaka property buying is about to become a whole lot more fun and less frustrating than it has been over the past 18 months. That’s not to say that the Buyers Agent NZ team haven’t been buying over this period, but it hasn’t been from a FOMO (fear of missing out) perspective. It has meant being very selective and having a few more frustrations along the way. We have been in the game long enough to know that things always seem to work out for a reason – if it’s meant to be it’s meant to be. Marion and I have certainly had some absolute fantastic purchases along the way recently, but we are excited of the prospect of having more control as buyers.
The perfect storm for buyers arose out of FOMO driven by fewer listings, low interest rates, buyers relocating from the cities, overseas New Zealanders returning and plenty of evaluation of what’s important in life over lockdown in 2020, combined with realisation that working remotely was a reality.
I am not confident enough to predict that there will be a significant drop in Wanaka property prices. This region did not see that during the GFC when vendors waited out the period until the market turned. This drop is however starting to happen in other areas of the country. In Wanaka there are very few listings currently. Buyers have stepped back and are opting to slow their purchasing down. The vendors agents are reporting a much lower level of enquiry.
Signs of the slowing Wanaka property market are also evident in the increased number of days to sell, the number of properties being passed in at auction and the drop in the number of offers on a property. FOMO has turned to FOOP (Fear of over-paying).
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 tool box is imperative.
The turning in residential real estate market conditions is a result of a combination of factors not the least that the property sector in New Zealand tends to run in cycles and it was simply time for a price correction. Factors implicated in affecting the slow down include government legislation regulating mortgage availability, tightening of the Reserve Banks LVR rules, the Omicron wave, the rise in interest rates combined with the predictions of further increases. The general economic outlook is also hugely significant. Many businesses within New Zealand are facing unsustainable financial conditions. Inflation is a concern and the global scenario relating to the unrest in Europe is not to be underestimated. Inflation rising affects the cost of borrowing money. The level of inflation is currently the highest that it has been since the 1990’s. This is currently a global phenomenon and will be fuelled even further by such things as petrol price rises and food shortages which are being impacted even further by Putin’s actions in Ukraine.
Core logics tracking of house prices saw a significant fall in the rate in house price growth, the rate of which had been excessive in the period from September 2020. In 7 of the 15 regional centres the first sign of prices falling is evident. Not in Wanaka or Queenstown, yet.
So – are we finally seeing a buyers market – times are turning in many other areas of the country, hopefully, we have and its time to get out there and some fun.