MARKET COMMENT AS AT 23rd April 2019
February’s trend carried over into March with a reduction in sales numbers nationwide compared with the same month last year down from 7964 to 6938 ( -12.9%). The Real Estate Institute, however, report that Wellington experienced an active market in March and also saw a much-needed increase in the number of properties coming to the market. House prices in Wellington generally are holding up and a small increase in median price was recorded for the Wellington district in March.
Our own experience is that buyers are taking longer to make buying decisions; a natural consequence of there being less heat in the market. Tommy’s however are optimistic that there will be a resurgence of buyer activity in the months of May/June as vendors endeavour to meet the market before the onset of winter. On past experience, the months of July/August have not proved to be the most popular time for home owners to open their homes to public viewing so we are predicting increased activity in the preceding months.
Interest rates are at an all-time low and with the Reserve Bank again reviewing the Official Cash Rate on 27th March and leaving it at 1.75%, the same level as it has been since November 2016, any significant increase in the costs of borrowing seem unlikely in the short to medium term at least. This will be encouraging for first home buyers.
A significant driver of real estate market activity is the part played by property investors. This sector has tended to hold off recently due to the uncertainty surrounding the possible introduction of a Capital Gains Tax (CGT). Now that Government has indicated that a CGT will not form part of the taxation review, there is likely to be greater interest from investors in the months ahead than what we have witnessed in recent months.
Tommy’s believe that there will be a good level of sales recorded in May/June 2019 and look forward to assisting clients with their real estate plans and aspirations.