MARKET COMMENT AS AT 5th SEPTEMBER 2019
With the winter months now behind us, Tommy’s believe that the months leading into the end of 2019 are likely to produce a significant increase in market activity. In recent weeks, Tommy’s has appraised a number of properties many of which will be coming to the market in the next few weeks. This is not unexpected and is a trend that we have come to expect with spring historically being a time of the year favoured by many home owners for selling their properties.
Although leading Auckland real estate Company, Barfoot and Thompson reported that their company sales in August were at their lowest level for the past 9 years, this pattern has not been replicated in Wellington where our more consistent market has continued to produce acceptable sales levels.
There are a number of “feel good” factors that give Tommy’s confidence for the immediate future.
- A record low Official Cash Rate has resulted in a further reduction in interest rates and there is every indication that this downward spiral may have further to descend yet! Has mortgage finance ever been cheaper? We doubt it and that must be good news for borrowers.
- The recent government announcement that minimum deposit levels have been dropped from 10% to 5% for Government backed mortgages must stimulate buyer interest at the first home buyer level with a corresponding flow on effect.
- High rental levels while making life difficult for tenants are likely to stimulate investment buyer interest despite the recent introduction of minimum standards being set for rental accommodation. We still advocate real estate as a viable medium to long term investment option compared to other forms of investment.