MARKET COMMENT AS AT 20th MAY 2019
Real Estate sales activity nationwide for the month of April revealed a reduction in sales numbers in 13 of the 16 regions throughout New Zealand with sales at their lowest level for the month of April for five years. The fact that school holidays, Easter and Anzac day all fell within the month of April is considered to be a contributing factor. Notwithstanding this, whilst home buyers are perhaps more circumspect and are taking longer to commit to buying decisions, prices generally in and around Wellington are holding up for well- presented properties.
The announcement on 8th May by the Governor of the Reserve Bank that the Official Cash Rate (OCR) was being reduced further to an all- time low of 1.5% has been welcomed by home buyers and seems likely to stimulate the market in the weeks leading into winter. Following the OCR announcement, the major lending institutions immediately made further cuts to their already moderate interest rates and this has been welcomed in particular by first home buyers.
A significant component of the Wellington market is the part played by property investors and with low interest rates on offer and the threat of a Capital Gains Tax now behind us, we expect this market sector to become more active than has been evident in recent months. Coupled with this is the fact that the demand for rental accommodation in and around Wellington is unsatisfied and good returns are accruing to property investors.
In summary, Tommy’s foresee a steady market in the coming weeks before the usual slow- down in market activity over the depths of winter. Demand is strong and we believe the remainder of May and into June/July should present good selling opportunities.