This spells bad news for sellers
Hutt Valley house prices are taking a dive – and for some sellers, that means taking a huge loss.
According to CoreLogic’s House Price Index (HPI) for December, property values slipped by 5% nationally over the calendar year – the largest annual fall since a 6.4% drop in June 2009, when real estate was hit hard by the Global Financial Crisis.
The Wellington region has experienced a much bigger fall, however, with Wellington City down 15.6%, Upper Hutt down 20.2%, Lower Hutt down 18.9%, and Porirua down 16.4%, Stuff reported.
In the Upper Hutt market, “price drops” were now common, making it a tough time to sell, agent Ollie Flemmer said.
In Timerlea, Upper Hutt, for instance, a three-bedroom property with the reduced-to-sell banner across it was listed at enquiries over $550,000. First listed on Aug. 1, its value was estimated by Homes.co.nz to be at $815,000 in December 2021 but was now $565,000.
Aware that the market is declining, buyers are reluctant to commit and are waiting until it hits rock bottom. Flemmer said it could be difficult to agree on an asking price, but setting the right price was the key to selling.
“As long as the vendor is realistic, houses will still sell,” he said.
Flemming believes the current slowdown is the market correcting itself.
Sellers who have seen the value of their house decrease by hundreds of thousands of dollars would find it hard to cut their asking price.
Flemmer said the Timberlea property would “easily” have sold in the $700,000s last year.
On the hills of a suburb of Lower Hutt, a 209sqm, four-bedroom house first listed on Oct. 11 is for sale at enquiries over $780,000. It last sold in April 2017 for $670,000 and has a current Homes.co.nz valuation in excess of $1 million – that’s down from its $1.36m estimated value in December 2021.
A three-bedroom house in Wainuiomata with the heading, “No plan B! Must sell,” has been reduced to sell at $505,000. First listed in October, Homes.co.nz valued it at $575,000 – way below its estimated value of $800,000 this time last year.
Agent Tepora Stowers said the Wainuiomata market was active prior to Christmas, but it was a challenging time for sellers.
“It is tough, but the key is that sellers have to be realistic in terms of price,” Stowers said.
With 450 houses on the Lower Hutt market, she said buyers are in a strong position.
Leanne Senior, Upper Hutt-based sales manager, agreed it was all the more important now for vendors to be realistic about pricing.
Senior noted that many buyers were finding it more and more challenging to secure loans from banks – and in some cases, saw the amount they could get cut by $200,000 or more.
She said prices in 2020 and 2021 were unrealistic and the plunge over the past year was the market settling at a more realistic level.
“I would present offers and I would be gobsmacked by the prices people were prepared to pay,” Senior said.
Katrina Shanks, CEO of Financial Advice New Zealand, said falling equity and the prospect of a hefty increase in mortgage repayments are putting many homeowners in a challenging position.
Her advice? “Don’t put your head in the sand” and to hope problems go away.
Shanks urged homeowners to seek professional advice on how to reduce debt and cut expenditure on things like holidays and clothes.
Homeowners should remember houses were a long-term investment, and if they could hold on to their home, the value would grow over time, Stuff reported.
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