Wellington Market Update September 2022

Spring is in the air but are sunnier days ahead for the housing market?

This time of the year is traditionally one of the market’s busiest, as homeowners rush to list and sell their houses before Christmas. But that was before one of the worst slumps in decades saw the seasonally adjusted national median price decline for the first time since 2011.

Last month the Real Estate Institute of NZ reported Wellington saw a 5.9% annual decrease in its median house price — down to $809,100 in July.

“The number of attendees at open homes has fallen, days on the market have increased to 61 days in July 2022, and sales activity has eased,” REINZ chief executive Jen Baird says.

“First-home buyers are scarce. Many buyers lack confidence in their ability to secure finance, and vendors are left frustrated by their inability to sell.

“Properties are sitting on the market for 28 days longer than they were this time last year — partly due to buyer uncertainty and tightened lending criteria. Agents are hopeful this will improve in spring.”

Tommy’s Real Estate Sales Director Nicki Cruickshank says while buyers are returning to the market, vendors are hesitant to list.

“We usually see the start of a spring rush starting to emerge at this time of the year, but it is not at the levels we thought it might be.

“There has been so much negative commentary in the media about falling house prices that people are scared to put their house on the market.

“Ironically, there are more buyers appearing on the market every week and we are starting to see multi-offer situations again on some properties.

“So if the demand continues to increase and the supply doesn’t, we might actually see prices start to rise again.”

Does she think the market has bottomed out?

“I think if the market is not at the bottom, it is very close. A lot of commentary is done from banks and economists with data that is three months old, but we are on the ground and we are seeing that properties that weren’t moving a couple of months ago are selling.

“I’m not sure buyers will be spoilt for choice, but as a seller you have to remember you are competing against other sellers, so anything you can do to appear a more appealing prospect helps.

“My main advice is to have your house decluttered and clean.

“Staging is great if the house is empty, but mostly buyers are not looking at your furniture – they want to picture theirs and if it will fit into the room.

“Walk around your house pretend you are a buyer – that will give you an idea what should be there and what shouldn’t.”

Nicki says buyers who think prices may slip further risk missing out on locking in a purchase at today’s prices. “Buyers can wait – but it is always a risk.
“We saw how fast the market went up last year, we have seen how fast it changed and it could change quickly again, so you might end up trying to save five per cent – only for it to cost you 10 per cent more by the time you find something.

“The biggest difference this spring is that you can still buy a house that you want, not what you ‘could get’ last year.

“You have more time and don’t have to rush the decision as much.

“And the statistics are saying that the price gap between a three and four-bedroom house has got smaller, so it is a great time to scale up.

“Remember, you are buying and selling in the same market and it’s all about the difference.”