But the current environment still presents plenty of challenges, realtor says
“With three quarters of our regions still up on last year, much of the predicted doom and gloom has not been realised but the current environment still presents plenty of challenges,” according to Tim Kearins (pictured above), owner of Century 21 New Zealand.
Kearins’ comments follow the release of REINZ’s Monthly Property Report for August, which showed a 5.9% annual decline in median house prices across New Zealand to $800,000 in August. That was down from $850,000 in the same period last year and was lower by 1.2% month-on-month compared to July.
According to the REINZ report, August is typically a slow month, with market activity further affected by concerns around rising interest rates and inflation.
“However, there are early signs of a spring lift as vendors balance price expectations with reality and traffic through open homes increases,” it said.
Read more: More migrants are keen to buy their first home in NZ – C21NZ
Data showed that only four of the 16 regions saw annual declines in the median house price, with the entire South Island up on the same time last year. And with the major markets of Auckland and Wellington two of the four regions which recorded decreases, REINZ said this affected the annual movement in the national median price.
“With overall house prices softer across the country, it’s important for vendors to engage the right real estate agent from the outset,” Kearins said. “In this market vendors need a skilled salesperson and negotiator who will defend their property’s true value and can close a deal.”
Across New Zealand, the number of residential property sales in August saw an 18.3% annual fall to 4,891, from 5,983 in August 2021. Meanwhile, the total number of properties available for sale nationally grew by 107.7% to 25,441, from 12,249 in August 2021.
“Buyers should select an agent who’s continuing to sell houses for good money,” Kearins said. “Statistics show in this market, high volume sellers are often low-value sellers. Selling plenty is not as important as selling well.”
Kearins said that despite changes to how lenders should interpret the Credit Contracts and Consumer Finance Act (CCCFA), the hurdles remain too high for many Kiwis seeking a mortgage. He was keen to point out, however, that it doesn’t all begin and ends with the big banks.
“Mortgage brokers like Julius Capilitan of Century 21 Financial do all the running around,” Kearins said. “Brokers can deliver competitive rates and greater borrowing flexibility than the traditional lenders and may just provide some light at the end of the tunnel for first-home buyers.”
He also reminded prospective vendors that now is not the time to sell privately, despite the temptation to save on commission.
Read next: Why selling privately, though tempting, will cost most vendors
In late 2020, REINZ released extensive industry analysis that showed homeowners who use a real estate agent can expect to get on average 15% more for their property than they would by selling it privately.
“There are still plenty of buyers out there, boosted by the government’s fast-track resident visa scheme which sees potentially tens of thousands of our newest residents eligible to purchase property,” Kearins said. “While the market has softened, we’re still seeing good agents, selling good properties for good money.”
