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.
Work with your sales consultant to make sure your presentation is as good as it can be. If the property is vacant, then staging it with furniture can make a big difference to appeal. Invest in marketing to make sure your home stands out above the competition and we urge you to consider setting up a date for sale by either Auction or Deadline, to help buyers view and make a decision on your home as quickly as possible.
– Richard Stringer, Harcourts Dunedin Manager.
In February there was a slight lull in the market in certain price ranges. While the $200,000 to $500,000 range remained buoyant and competitive, other price ranges varied considerably.
However, the March statistics seem to confirm it’s back to business as usual – demand continues to severely exceed supply, driven by first home buyers and locals climbing the property ladder. The median sale price climbed to $439,000 – up 17% on the same time last year.
We are seeing a market where buyers are more attracted to properties that are well presented and offer an easy emotional decision to buy. If the home needs maintenance work or refurbishment, buyers are not hurried to make a decision. For homes requiring some work the market is far more price sensitive.
In light of legislative changes, some investors are bowing out of the market while values are high and rental property laws are looming. These homes are being bought by either first home buyers, or new investors. It would seem that despite any pending legislative changes, property remains a preferred investment for many.
The Dunedin office continues to deliver great results to our clients, particularly through no priced auction and deadline sale campaigns. Our team are working closely with their clients to style their homes and create more buyer demand to maximise the result for the vendor.