If you are following our local property market, or are just interested in real estate in general, then you are likely aware that our property market post Covid-19 has not reacted quite as was expected. In the latest release of the REINZ property sales data, Bindi Norwell, Chief Executive at REINZ says: “New Zealand’s property market continued to defy expectations in July with sales volumes increasing by 24.6% when compared to the same time last year. This was the largest annual percentage increase in sales volumes we’ve seen for the country since September 2015, highlighting just how confident the market was during July.”
While Bindi’s comments reflect the situation generally around the country, here in Christchurch our market was in effect little different. The latest sales figures for Christchurch city tell us that there were some 610 confirmed sales. Our median sale price was $491,000 and the days on market sits at 31 days on average. When we compare these Christchurch results to the same period last year, we see our sales have increased by 17% compared to the previous July, still a hugely strong result which shows that even our relatively stable market is not immune to the current interest in property. It is the value of our property that most people like to see staying positive, as this directly impacts on our perceived wealth and wellbeing. But as we all know, as property gets more expensive, it can be harder for some to get into the property market. Our current median sale price of $491,000 is a huge lift over the recorded value for July last year of $450,000, but it does underline the pressure on prices our market is experiencing. Even with this price pressure, there is no doubt that the first home buyer is active and taking advantage of the opportunity that low interest rates and available monies now offer. A recent affordability graph we saw relating to several of the major population centres around the country still rated Christchurch as the most affordable major city to buy in, and the results are indicating that buyers are well aware of this. Auction is increasingly favoured by clients as a preferred method of sale and this is reflected in Bindi’s comment about the rise in auction numbers nationally. “Every auctioneer we speak to has said how buoyant the market is right now and how unusually busy auction rooms are for this time of the year – both in terms of the number of registered bidders and people just getting a feel for where the market is at,” says Norwell. Here in Christchurch, Harcourts continues to prefer this method of sale and we had a 36% increase in auction listings when compared to July 2019. We commented last month that I expected to see the days on market figure drop as we get further away from our lockdown period here in Christchurch, and in fact that is exactly what has happened. The quoted 31 days brings the days on market back to what is the typically expected period for property sales in our current market conditions. As a seller, if you have been exposed to the market for a time period longer than this, perhaps you need to re-address your pricing expectations, or your marketing, or even the company you are using to sell your property. Another indication of how strong a market we are experiencing currently is the House Price Index. This is a computer algorithm that generates an all-encompassing number, taking into account every factor that could conceivably impact on the market. When you think of what is happening both globally and nationally, we might expect that this index would experience some softening, but in fact the opposite is happening. The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 9.4% year-on-year to 3,021. The HPI for Christchurch sits at 2,539, an increase of 8.6% on the index of a year ago. Overall, we are currently experiencing a very healthy market and expectations are that it is likely to continue. Personally I don’t feel the looming elections will have any effect or create a slow down as the current pressure on our housing stock shows no sign of abating in the near future, especially with the prospect of more Kiwis returning home once global restrictions ease. Additionally, I think any future government has more than enough on its plate to ensure the country is employed, safe, housed and fed. So, it is unlikely there will be too much tinkering with the housing market in the short term. Source: Jim Davis - Harcourts South Island Regional Manager By Bryan Thomson, Managing Director Harcourts New Zealand The period leading up to making a decision regarding buying
or selling property is always a time flooded with competing and conflicting information and opinions being promoted by seemingly qualified individuals and outlets. Who is right and who is wrong and who do we believe, are questions we all ask. Put simply, especially in 2020, when we have even more information to assess or circumstances to consider than normal, our view is that facts are what should be relied on rather than opinions. The facts right now are simple. We have a typical winter market where listings are lower than buyer demand. This supply/demand imbalance is seeing good competition between buyers for available stock in almost every marketplace in New Zealand. The current and historically low mortgage interest rates available are adding to buyer confidence and competition. In addition, as a country we have a shortage of housing stock for our population. This is a population that loves to own their own home, and also to invest in property. These underlying facts all add up to a recipe for confidence in the future of the real estate market in New Zealand. In 2020 we can’t ignore the fact that the world is battling a pandemic, and on top of that in New Zealand we are facing a general election in the spring. So, what impact will be felt from this, and what should buyers and sellers of real estate consider in their decision making? Reality is that the pandemic response within New Zealand has put us in an envious position of almost normal life, (aside from missing our beloved overseas travel), and is driving Kiwis with a need for somewhere to live and invest. The lockdown period has also led many of us to review the style of home we live in, thus encouraging further selling and buying decisions to be made. Election time can sometimes create a hesitation in the market while people wait and see what might happen post-election night. This year, given the supply/demand imbalance, any hesitation may be reduced. In addition, the Covid-19 pandemic has generated a let’s get on with life attitude across the world. Based on all the facts above, our advice is simple; if you’re considering a sale in the spring, we would strongly suggest you list right now. We know the market is strong and buyer demand is active so why wait to compete in a spring market when historically there has always been a flush of new listings to offer buyers choice? If you are looking to buy, do your sums well, consider your employment or business status and go to the market and secure your new piece of New Zealand with confidence. Put simply - this isn’t an opinion, just sound advice based on facts. This blog was originally published on the Harcourts New Zealand Property Focus Newsletter July 2020 |
James Twiss
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Greg Roberts
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Archives
September 2020
|