Will spring herald a much-needed resurgence in the number of houses for sale in Wellington?
“Yes, I do believe stock levels will grow in the spring, they always do,” Tommy’s Real Estate Sales Director Nicki Cruickshank says. “If they do remain low it will simply keep the prices high, with demand higher than supply.”
The capital’s housing supply dropped to record lows over winter. The Real Estate Institute of NZ reported there was only five weeks’ inventory in June, which was six weeks fewer — a fall of 14.4 percent —than the same time last year. And according to realestate.co.nz, national housing stock hit a 14-year low in July. “The property market has been pretty steady over winter,” Nicki says.
“While stock levels remain low, as they do most winter, demand has continued to be high, and therefore stock sells quickly — stock doesn’t get a chance to build up.
“And, like last year, it felt like a busier winter than normal. Mostly this is down to the fact that people can’t travel.”
She says there are signs that more houses will be coming to the market in spring. “This is due to several factors.
“Those that have been wanting to move but have put off while they perceive stock levels are low, probably can’t wait any longer.
“I also believe a number of mum-and-dad investors will leave the rental market with the loss of ability to claim their biggest expense in interest payments.
“Also, some of Wellington’s older houses are just too difficult to get the ‘one size fits all’ rules to meet the Healthy Homes changes. So, I would expect these to be sold off, too.”
Regardless of these factors, spring is normally busier than winter, anyway, Nicki says. “People start to feel better coming out of winter, and in terms of selling, feel their house will look better in the spring, particularly their gardens.
“I think demand will continue to be good across the Wellington region.
“A lot of the growth does come in the first-home buyers’ area, which is mainly price driven.
“So, the parts of Wellington that will grow the most will depend on where these buyers perceive they are getting better value.”
Nicki says Wellington continues to be busy with developments. “Tommy’s alone have two large apartment buildings coming to the market in the city, which are targeting first-home buyers and investors.”
She expects it to remain a sellers’ market in spring, “but not to the same extent it has been over the last couple of years.
A rise in rates seems inevitable, with pundits picking the Reserve Bank will raise the Official Cash Rate on August 18 to help contain house inflation.
“I think we are seeing house prices continue to rise like the rest of the OECD countries as there is still a backlog of demand, but not at the high levels they have been,” Nicki says.
“It is simply not sustainable.
“It always feels like you have paid too much when you buy a property, but when you look back months later, you are pleased you are in the market and the decision you have made!”