Majority of Kiwi home buyers say it’s a good time to buy
The results from our latest home buyer survey
More homebuyers are recognising the opportunities in the current property market with nearly two thirds of respondents (63%) in Trade Me Property’s October Buyer Survey, saying that the current spring market is a good market to buy in.
Buyers’ biggest concerns were over rising interest rates (27.13%) and there being a lack of suitable properties on the market (21%). They were also worried that house prices would continue to fall after they bought (18.97%) and about inflation and cost of living (17.65%). Almost half of buyers (49.30%) expect house prices to decrease in the next 12 months.
“Our research found active property seekers weren’t feeling particularly hampered by their ability to get finance or to save enough for their deposit,” said Trade Me Property director Gavin Lloyd.
Rising interest rates and a fear that house prices will continue to decrease after they buy, was more concerning to those buyers still sitting on their hands at the moment, he added.
Buyers enjoying price falls for the first time in a decade or more
Principal economist at Infometrics, Brad Olsen isn’t surprised that buyers are saying it’s a good time to buy, as it’s the first time since 2011 that house prices have fallen across the country.
For people who had seen the housing market as out of reach, they’ve now seen those prices pull back and the expectation is they can look a bit more, he said.
With a smaller pool of buyers they’re able to command a stronger bargaining position, and people realise that this is a market where they can explore opportunities, he added.
“There isn’t the frenzy of getting into a house that there was, people are not throwing cash in the fireplace,” warned the Infometrics economist.
For a lot of people who might be thinking of buying in the coming months, the lending costs are likely starting with a 6% which is pretty challenging to new buyers, who will feel the interest rates more, said the economist
The Trade Me survey found that In Auckland, 25% of buyers planned to fund their deposit with the help from family, a greater proportion than Wellington (19%) or Christchurch (14%) because of the city’s higher prices.
The economist sympathised with less active buyers worried about paying too much and about rising interest rates.
“After working so hard to get on the ladder, people don’t want to extend themselves when prices are falling, I think that’s quite realistic. Anyone with half a brain is not going to pay a cent more than they have to,” said Brad.
What real estate agents are telling buyers
Agents in the main centres were pleased to hear of the positive buyer sentiment shown in the survey from 936 engaged Trade Me Property buyers. They supported the findings with reports of strong open home interest on quality homes at the moment.
Ray White agent, Lawrence von Sturmer reported very strong interest in a beautifully presented family home in Pt Chevalier’s Moa Road. The attractive home has been priced by negotiation which opens it up to all markets, said the agent.
“We had 30 groups through in half an hour on Sunday,” said Lawrence. And two of them have already said they’re wanting to make offers.
For those trading up, or upsizing, the gap between what they were getting for the sale of their house and what they would pay for their next house was reducing, claimed Lawrence.
“If you’re upsizing, the gap between going from one home to the next bigger one, is much easier than it was a year ago. You’re getting much more for your money if you’re upsizing,” he explained.
If you’re going to own the house for more than two years, it doesn’t matter if the home’s value continues to decline after you’ve bought, added Auckland agent, Emma Duncan of Anne Duncan real estate agent.
In her market of Mt Albert and the surrounds, buyer activity has picked up in the last month with lots of activity and some homes getting multiple offers, said Emma. One house going to auction sold prior to the auction date. It’s a very active market but prices are down, she said.
To buyers she said: “If you’re in a cashed up position, and ready to buy, you’re in a great place to pick something up.”
Christchurch agent and business owner Tall Poppy’s Debi Pratt said to buyers afraid they’re buying in a falling market, over time property will always increase.
She said: “You buy based on what you can afford at the time. Don’t look at the value dropped and enjoy your house. It’s only relevant if you have to sell the house soon after buying.”
More properties coming to the market to entice buyers
The so-called spring rush may be a bit late coming to the party in some parts of the country but buyers should prepare for some tempting properties in the coming months.
Spring is late this year but it will arrive, says Lowe & Co Managing director, Craig Lowe. “November and March are the two busiest months of the year and I don’t expect that to change,” he said.
Craig said he’s seen a flight to quality by buyers. “People are aware of how expensive it is to get work done so if they can buy things that have improvements done in yesterday’s dollars, then that’s very attractive,” said the agent.
At the same time, in the blue chip suburb of Kelburn in Wellington, the sale of a large ex-rental needing work went like clockwork because the agent-owner priced it right, he said.
Tommy’s Real Estate agent, Alice O’Styke is promising more listings to come in the Wellington market.
The capital’s market is down on listings, but homes will be coming onto the market right up to Christmas. We’ll see listings continuing in the first and second week of December, said Alice.
“Buyer activity has really picked up,” she added.