MARKET COMMENT AS AT 21st MAY 2021
Tommy’s best gauge of market trends is based on our own sales figures which continue to tell us that demand for good property remains strong. Currently, there is little evidence of prices falling although the Government remain confident that changes made recently to the Brightline Test and to the taxation concessions previously enjoyed by property investors will kick in over time. The Budget announcement appears unlikely to have any significant impact on the property market at least in the short term.
It is a fact that some investment buyers have retreated from the market following recent Government announcements and media reports suggest that the number of active first home buyers has also reduced. This is not surprising due to the frustrations first home buyers have endured with strong competition and ongoing price increases. All this on a market that is still desperately short of housing stock.
Conversely, Kiwi’s returning home from overseas have added to the buyer pool and will help in keeping the market active and prices firm. Suggestions that interest rates have bottomed out are probably correct but any increases in coming months are not expected to be significantly large. Westpac’s economists suggest a modest reduction in house prices is likely in 2022 and 2023 based on recent government policy changes and also predict an increase in mortgage interest rates. (Dominion Post 19/5/21).
Winter looks like a good time to sell; a time when there is usually less competition for home sellers. Yet another reason for prices to hold up and for homeowners to take advantage of today’s buoyant market!