Things have been incredibly busy in downtown Wanaka over the past 2 weeks. Even the mountain carparks have also reached capacity frustrating some on their long awaited ski trip.
I’m definitely sensing a change in the Wanaka real estate market despite what is being reported for the region and what the local stats are showing. Wanaka and Queenstown have bucked the trend to date with rates having risen slightly (1-2%) compared with other main centres. There is a definite change in the pace however and some properties are not being sold during their listing period. There is no sign of any forced selling pressure out there. BUT I’m seeing a two tiered market, the upper end of the market seems to be ticking along nicely. The entry level (which is sadly up at the million dollar mark) of the market is definitely a lot slower and definitely more subdued.
The Wanaka real estate numbers show a total sales volume of 48 – equivalent really to the 45 in June and again similar to the same period last year.
There is what I would consider an increasing trickle, but not a flood of properties coming to the market currently. This may very well keep the prices at the higher end of the range that they could be at as the demand can exceed supply. My regular catch ups with local valuers indicate that this is the key factor holding up not just Wanaka house prices, but Queenstown’s too. There is unprecedented demand in the higher end of the market from what I am witnessing.
The main reasons why the property market is slowing down relate to; affordability challenges, rising mortgage interest rates from mid 2021, a tighter lending environment/ tightening of LVR rules, new tax rules hitting investors and prices getting excessively high. The finance options are however easing significantly compared to early this year when the credit crunch was at its worst. Banks are becoming more willing to advance funds for a house purchase.
Section sales have been significantly impacted. There is a real concern from buyers about the impacts of product supplies and the implications of that for price over runs. The reports of building companies liquidating in Australia with the odd one popping up here also adds a level of conservatism to would be construction contenders.
The weaker phase of the market seems to be predicted to continue into 2023. During the GFC in the Wanaka and Queenstown region prices didn’t really drop. Vendors hung out for the higher prices or delisted and embarked on plan B.
My thoughts are that when the market goes again it will take off very quickly. The main implication is that as each month goes by it gets riskier to keep holding out for the absolute bottom of the cycle if you are a buyer. Don’t try to pick it but start to focus on what you really want – that house in Wanaka that you’ve been procrastinating about buying for too long!!!! But not just any house – the RIGHT house. Be fast out of the blocks to grab it when it comes up over the next 6 months.