Wellington Market Update | August 2023
The buyers are back in town!
That’s the belief that’s putting a spring back into the step of real estate agents as winter closes on a prolonged listings slump and warmer weather beckons.
“Every year we see more properties come to market and buyer activity pick up in spring,” Tommy’s Real Estate Sales Director Tim Clark says.
“We expect to see this again this year and with buyer activity already on the rise, we suggest that coming to market sooner may well be better for vendors.”
His confidence coincides with the latest CoreLogic report showing prices starting to rise in Wellington and Auckland.
“There are several key factors pointing to the trough for house prices, including a broad peak for mortgage rates, albeit some further tweaks by the banks can’t be ruled out, an easing in the Credit Contracts and Consumer Finance Act (CCCFA) and loan to value ratio (LVR) rules, still-high employment, and solid net migration flows,” the report says.
“If you have a good property and are ready, go to the market now,” is Tim’s advice. “In July we saw over 60 per cent of all sales in our office sell under a multi-offer situation — which is exactly what vendors want to see when they go to market.”
Despite signs of a turnaround in sellers’ favour, the single biggest challenge for the local market is the lack of quality stock.
The historic shortage of houses for sale spans the entirety of the market, from first homes to apartments to family homes.
“Right now, for well-presented properties that are move-in ready with no work to do, there is demand across the full spectrum,” Tim says.
“During the downturn, the best-performing properties have been those that have no issues, such as missing consents or remedial work, and were well presented.
“But now that buyers are back, and ready to purchase when they find the right property, they’re also prepared to consider properties that they may not have done when the market was abundant with listings.
“This means that properties currently on the market are seeing more searches, private viewings, and busier open homes than we have seen in recent times.
“Some vendors appear to be holding back right now for a number of reasons, including the impending election and concern that they are not prepared to sell at what they may perceive as the bottom of the market.
“At Tommy’s, we would advise that rather than the market being at the bottom, we are now at a new normal.
“And when you buy and sell in the same market, price becomes less relevant.”
Tim says while the buyers are back, prices are unlikely to rise sharply in the short term. “Any increases will be modest for the foreseeable future.
“In the meantime, we are recommending to vendors who are ready to go to market to go sooner rather than later to beat the post-election and spring rush.”
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