Lack of properties for sale is putting pressure on house prices and speeding up sales

It has all been said before, but every day it seems the media reminds us of the explosive real estate market we are operating in. Record after record of sales numbers, house prices and the time is taken to sell are broken and there is a constant reminder that first homeownership is fast becoming a dream for many people. NZ has traditionally been a haven for family living based around the concept of the breadwinners being able to provide a warm and safe environment for their dependants at an affordable price. This scenario has changed rapidly through in the last year or so. December finished with record sales and there is nothing to indicate that this frenetic market won’t continue into 2021.

The latest press release from the Real Estate Institute of NZ (REINZ) issued on 15^th January 2021, succinctly summarises the latest market activity and is worthy of repeating for the benefit of readers of Tommy’s Lifestyle magazine. The heading of the report repeated below summarises the main cause of the current rampant market.

The first quarter of each year has historically produced a high level of real estate activity and we encourage home sellers to contact our sales team to ensure that your property transactions take advantage of this situation. We know the Wellington market, we have access to up to date market data and with a variety of marketing options, we believe that we can add value to your real estate experience.

Lack of properties for sale is putting pressure on house prices and speeding up sales.

“As the total pool of properties available for sale in New Zealand falls to record lows, this is continuing to put pressure on house prices, with the country now seeing a new record median house price for the fourth month in a row according to the latest data from the Real Estate Institute of NZ, source of the most complete and accurate data in NZ. Median house prices across NZ increased by 19.3% from $628,000 in December 2019 to a new record median price of $749,000 in December 2020. The Wellington region recorded an increase of 18.6% from $685,000 in December 2019 to $812,251 in December 2020.”

Bindi Norwell, Chief Executive at REINZ says: “For the fourth month in a row, NZ has seen house prices reach a new record. 11 regions and 27 districts saw record-high median prices, a continuation of a pattern we’ve seen in the housing market for the last few months and highlighting how strong the residential housing market is in all parts of the country.

Currently, we have half the inventory levels we had back in December 2018. Therefore, there just isn’t enough choice for people looking to purchase which has meant that there is significant pressure being placed on house prices in most parts of the country. When you add into the equation the fact that there are record low-interest rates, people are more willing to compete to secure a property they want.

The lack of choice and high levels of confidence is also causing properties to be sold at the quickest pace we’ve seen in 17 years. The median number of days to sell a house is now just 27 days showing how people are moving quickly to secure good properties. December 2020 saw 8,935 properties sold which is 2,392 more houses than the same time last year. That’s an additional 77 properties sold every single day in December which is a pretty remarkable result and shows what a strong position the property market finished 2020 in says Norwell”.

None of the above statistical data will come as a surprise and it reinforces Tommy’s reading of the market and our own experiences in the greater Wellington area. When the REINZ quotes figures for the Wellington region they are referring to the entire Wellington/Hutt Valley area, the Kapiti Coast and the Wairarapa. Obviously, there are market variances within this region and in some preferred locations the prices will be higher, the turnover greater and the length of time taken to sell will be shorter than the regional average.

Whilst selling may seem to be a mere formality at the present time, as a home seller you will only get one shot at capitalising on the opportunities available. It is important therefore that you get the best possible advice on presenting your home for sale, working to a strategic and proven marketing plan and finally that you have an agent representing you who is an accomplished negotiator. Tommy’s has trained teams at all our offices who can offer a high level of professional service. We invite you to give us a call for advice and a sales service that produces good results.