Wellington house prices have fallen since Christmas but are still probably 20 per cent higher than this time last year, Tommy’s Real Estate director Nicki Cruickshank says. “It feels to us that the market may have corrected somewhere between 5-10 per cent since the end of last year. A lot of sellers have rushed to market hoping to catch the peak but that ship has sailed.”
She says with so many more houses on the market, some aren’t meeting the sale price expectations of their owners. “We will see a lot of these come off the market in the next week or two, with sellers prepared to ‘have another try’ in spring. The only problem with that, of course, is that you will get the normal spring rush plus all of those who didn’t sell in the autumn.”
Nicki advises homeowners who want to sell to keep their properties on the market. “The number of buyers out there is slowly picking up and your house will sell. And even though there has been a correction, you have to remember it is still probably 20 per cent higher than it was this time last year, and if you are buying and selling in the same market, it doesn’t matter.”
Buyers, meanwhile, can choose from the widest selection of homes in years. “At the moment you actually can choose to buy instead of having to buy what you can!“ Nicki says. “So if you feel you are ready, can afford your mortgage, and have your finance in place, there is never a better time to buy than now. Of course, everyone always wants to buy at the bottom of the market and sell at the top but that is never easy to predict.
“I think we may have seen our drop in Wellington, and things will flatten out for the next couple of years. It has happened relatively quickly if you compare to the Global Financial Crisis. The 2008 fall got to nine per cent, then the market steadied and worked its way back up within a couple of years and then took off. This seems to be the pattern in Wellington, excluding the extraordinary growth over the past couple of years – so the latest fall just had to happen.”
At the same time, interest rates are creeping up. But Nicki doesn’t believe they’re a critical factor for buyers. Although interest rates are rising, they were not sustainable at 2.25 per cent and were always going to rise,” she says. “In real terms, they are still low and buyers are being stress tested by banks at a much higher level, so are aware of what their costs could be.”
She says obtaining loans is the single biggest factor holding back buyers, with lending becoming much tighter after the reform of the Credit Contracts and Consumer Finance Act. “First-time buyers are slowly returning to the market, and if the regulations start to ease I am sure we will see more soon. The market is the market – and good houses in Wellington always sell well as there is never enough of them. If you are buying selling in same market, and upgrading, you will actually be better off in the long run as your more expensive house will increase more next time the market is in an ‘up cycle’. House-buying is a long-term thing – you will get ups and downs in the market but overall homeowners do well in Wellington.”