Vendors are seeing the market dynamics and understand that the market is more complex now, but they are still holding out for the right price in many instances which is protecting values across most levels.
The lower level of sales volumes in some areas compared to the same time last year can be attributed to a number of things – the raft of legislative changes impacting the housing market at the moment, the increasing difficulty in accessing finance (despite a record low OCR and very low mortgage rates from the banks) and vendors’ pricing expectations.
While vendors and investors take a ‘wait and see’ approach to the housing market – much like you would normally see around election time, first home buyers are steady and consistent. Speculation of a Capital Gains Tax – since rejected by the Government, the new requirements under the Healthy Homes regulations, ring fencing for tax losses on rental investments, and the offshore buyers ban has caused some investors to think twice about investing in property and has pushed some to sell their investment properties – adding to the rental properties shortage most areas face.
It is clear however, that if investors were withdrawing from the market, listings and sales would be much stronger. The lower level of sales volumes suggest that many investors are holding on to their investment properties and weathering the storm, cemented in the market due to firm values and a predicted upturn.
From 1 January the real estate industry are required to comply with the Anti Money Laundering and Counter of Financing of Terrorism Act (AML). The impact on the industry has been minor thus far – we now need to identify and verify all of our vendors. The result of this process has so far indicated little change to days to sell.
In a time of exceptional growth in tourist and resident population, the Otago region continues to offer attractive opportunities for all budgets and objectives.
We often get asked, “When is a good time to list my property?” There is no wrong time to list as there are buyers who need to buy now for a variety of reasons.
With winter almost upon us the advantage of listing now is the competition for “like properties” is not strong and so buyers are more likely to be aware of yours. We can assist with ideas on staging your property and with ways to maximise exposure. Don’t miss the opportunity to sell by waiting until spring or summer and risk competing with many other vendors. – John Petre, Harcourts Alexandra & Cromwell Manager.
Property values have withstood dipping sale volumes, owing to continued demand for more affordable properties in the Central Otago area. We continue to see a flow-on effect as many buyers arrive from higher priced areas such as Queenstown, Wanaka and Auckland to buy their first homes, lessening their mortgage or to ‘get more for their money’.
Alexandra experienced an increase in median dwelling price, climbing to $495,000 in March 2019 from $460,000 the month previous. In contrast, Cromwell saw a slight drop of 4%, averaging at $657,000 in March 2019.
Many of our clients are opting for a ‘no price’ method of sale – auction and deadline sales are proving favourable as they allow the market to determine the value, ensuring the price does not hinder the outcome.
After the shortage of residential sections in Alexandra, new parcels of land are steadily becoming available – a further stage in ‘The Pines’ subdivision has alleviated some pressure and we are seeing very few on-sales, suggesting buyers are looking to put down roots in Central Otago. A new 18-lot subdivision at Pisa Moorings has also been approved by the Central Otago District Council hearings panel. The land should offer some relief to pent-up buyer demand and accommodation shortages in Cromwell.