The Australia RBA has reviewed their cash rate in view of the slowing economy. It is now becoming apparent that this country has mismanaged its biggest resources investment boom in decades and is now potentially looking towards a new government to change this situation.
China’s weak data has been a concern to the markets and a reduction in projected growth is forecast for this year. China’s reduced projected demand of coal and iron ore is directly affecting the Australian markets. However, business confidence still remains unchanged in a recent BNZ Business Confidence survey in New Zealand.
This is having a positive flow on effect on migrant flow between NZ and Australia reducing NZ net loss significantly over the last months of data. The net loss a year ago was 39,622, while the current net loss is 32,862.
Don’t wait for spring, because you will be competing with many other sellers who are also waiting to bring their property onto the market.
List your property ‘now’ when the stock of unsold homes on the market tightened to an all-time low of 25 weeks, based on the rate of sales, well down on the long term average of 38.1 weeks. The number of new listings in June represents an 18% fall and it is the lowest number of June listings for 7 years.
The housing market remains in favour of the sellers. This is driven by a shortage of listings for sale and low inventory across many regions which include Canterbury, Waikato and Central Otago. Wellington’s stock has fallen to 15.4 weeks, the lowest since 2009.
It remains a sellers’ market across 15 regions of the country. With supply of stock so low in many regions, the economics of supply and demand influences property prices upwards.
The asking price fell in June to $450,178 down 1% on the previous month lead by Auckland experiencing a slight fall; however, this was tempered by Wellington and Canterbury where the asking price rose.
Bob Brereton (First National Chairman) had the opportunity to attend lunch with the PM when he visited Motueka.
John Key’s speech was focused on the economy and the state of the nation, but also touched upon “a topic close to our heart, the housing market” said Bob.
“I spoke to Mr Key about the housing issue, that the Auckland market buoyancy misrepresents the median price for the country. Mr Key is mindful that a rampant Auckland market would have an adverse effect on the country and the Reserve Bank may want to intervene.”
John Key acknowledged that there needed to be further high level, meaningful engagement between the government and leaders in the real estate industry, which may encourage an industry wide discussion rather than a sledgehammer to our economy as proposed by the Reserve Bank.
The reason for the lack of homes for sale throughout New Zealand is not due to the economic conditions, as revealed in the First National Real Estate residential market survey for August.
The survey indicated that 68% of respondents said that sellers were waiting for spring to list their homes and this was the major contributor to the notable lack of homes for sale over the past months. Another reason is the lack of suitable properties available once they sell.
“Good sales over the past months have severely depleted stock levels which then reduce the opportunities for buyers.”Empty nesters‟ downsizing find little to choose from so are reluctant to list” says Paul Coltart, from First National Guardian in Wellington.
Compared to this time last year, 60% of the First National Offices stated that they have experienced an increase in appraisals; however, home owners have still been reluctant to enter the market.
The supply of listings is not corresponding with the increase in demand the survey revealed. “It is a sellers‟ market with serious buyers making multiple offers on properties for sale. Market conditions have never been better with low interest rates set to continue into next year,” states Colleen Milne, general manager, First National.According to the survey, home buyers visiting open homes have increased by 62% on the same time last year. Peter Wilson, of First National Reid & Wilson, Timaru backs this; “It‟s a great time to sell as buyers are plentiful and strong demand is having an inflationary effect on sale price. We are seeing evidence of very good lifts in values over relatively short periods.
In the Auckland market, “there are multiple offers on many properties. When buyers find something they like, if they have a house to sell, they are missing out to cash buyers due to the lack of stock,” states Gary Atkins, of First National Waitakere.
“The pressure on finding a home for sale increases in spring due to school zoning closing early in the season. If people are out of zone and are desperate to get into a particular school, the rush will be on to make sure they‟re in the zone by the end of the year,” says Jon Simpson from First National Rutherford, Howick.
Brent Howie, First National Taupo states, “the situation was slightly different in the Taupo region with the problem being that, in some cases, properties were overpriced. People will buy if the price is right.”
The message is clear: now is the time to sell while it is still a sellers‟ market. Spring will bring with it a greater supply of houses for sale which will boost the competition between sellers. Responding to the demand now will provide greater opportunities for a quick sell at a premium price.