Very few houses are being put up for sale in Wellington at the moment. Photo / Ross Setford
Wellington is “desperate” for homes to go on sale, as new data reveals the number of new listings in the capital has nearly halved compared to this time last year.
The region has had a larger decrease in total house listings than anywhere else in the country, which some real estate agents are putting down to beliefs National will be elected this year.
“We’ve got to bear in mind that we’ve got an election year coming,” said Professionals Wellington manager Charles Lindsay.
“Wellington is very politically aware and historically, three months to four months out from the election, things tend to basically stop.”
Figures from OneRoof show the number of new listings last month plummeted by 41.7 per cent from May 2022, the biggest drop for any part of the country. In actual numbers, there were 458 new listings last month compared to 785 the year before.
Meanwhile Wellington’s total listings have also taken a 22.7 per cent nosedive, with 555 less than this time last year. This was also the biggest drop in actual listings in the country.
Lindsay said people who bought before 2019 were “fine” in terms of house value.
“You’re still making a fairly hefty profit on your property.”
But those who bought in the past two years will probably be selling below what they paid for.
“So you’ve got 50 per cent of the market who are fine - they’ll sell their property without any worries because they’re still making good capital gain. But the ones that have bought just recently and need to get out because the mortgage rates are so high, they’re the ones that are thinking ‘oh no, I don’t think I will sell yet because I’m gonna lose so much money on my property. It’s a catch-22 position for some of them.
“Either sell now or wait and keep paying that mortgage and, you know, not buy your groceries on the weekend.”
Despite the lower number of listings, Lindsay felt there was “a little bit more positivity in the market”.
“I think that’s due to the fact that I think people are starting to think there’s going to be a change in Government.”
He believed the biggest change would be in prices for two to three-bedroomed flats, which investors were eyeing up in the hopes National would win the election and “stop the non-tax deductibility”.
“Some people are gambling on a change of Government but it might not necessarily happen.”
House hunter Jordi Boyd said she and her partner have been looking “inactively” for about two years, but actively since November last year.
“The market is not what it was when we were looking without intent, and now that we’re looking with intent, it’s a little bit rough,” she said.
They were looking on every website they could, but a house that fit their requirements - three bedrooms, some type of yard, and under $750,000 - popped up only twice a week.
She said the quality of the homes being listed had also dropped, possibly because people who had bought homes planning to renovate were now having to sell quickly to escape high interest rates.
“There’s a lot of rustic interiors that anyone with renovation skills would love, but unfortunately that’s not me,” Boyd said.
“Hope’s running low.”
One home buyer who wanted to remain anonymous said there were very few listings at the moment.
She and her partner put an offer on a house in Wainuoimata last week, where average house prices have dropped 30 per cent.
“They want a crazy amount on this house that needs significant work, but they still want the price that they thought they would get a year ago.”
The house was bought for about $400,000 in 2018 or 2019, but the sellers wanted $650,000 for it.
The woman said “just nothing” was available.
Ray White Hutt Valley real estate agent Phil Galley said he believed there were many reasons for the drop in new listings.
Investors holding on for a bright-line reversal, vendors being more conservative with the rising cost of financing, and an “impending doom mindset” with economic uncertainty were all possibilities.
“Less stock often breeds less stock,” he added, saying fewer people upsizing and downsizing meant fewer homes to sell.
Other reasons included a reduction in new construction, vendors being “fixated” on a perceived or actual loss, and vendors not realising they were late to sell.
“We had surges of homeowners trying to catch the boat thinking it was just leaving the dock, without realising it was halfway across the Cook Strait,” Galley said.
“From what I see on a day-to-day basis, there’s lots of psychology tied into selling and also, at times, a lot of unreasonable positions taken by both parties on either side of the transactions.
“From the vendor’s side of things, which is usually where the sticking point is, a good analogy I have with my clients is that it’s the equivalent of you trying to sell your Rav 4 for $50,000 when it’s worth $30,000 - because you need the money to buy the $70,000 Hilux. That arithmetic is never going to end well for you.”
He wanted to remind sellers the destination they wanted to move to had no bearing on the value they could sell their house for, and the fact they bought it for a certain price also had no bearing on what it was worth now.
“I guess what I am talking about is that a lot of homeowners try to pick the best time to transact - like it’s a game and they have the crystal ball.
“A house is only worth what someone is willing and prepared to pay for it, but ultimately I always give the advice that you should buy or sell based on your personal circumstances, not based on what a market may or may not be doing.”
Meanwhile, Tommy’s sales consultant David Vaughan sent out an email calling for people to list their houses for sale.
“Help – we are desperately short of houses to sell,” he wrote.
“You only have to attend one of our open homes on any Sunday to see the amount of people out looking. They are all saying the same thing: ‘where are all the good houses?’”
He said sellers should remember buyers are looking all year round and moving to Wellington every week needing somewhere to live.
He said it was common for housing stock to drop in winter, but waiting until spring “changes very little, other than missing out on some potentially serious buyers and having to compete with so many other houses on the market for buyers to choose from”.
Melissa Nightingale is a Wellington-based reporter who covers crime, justice, and news in the capital. She joined the Herald in 2016 and has worked as a journalist for 10 years.
Bay of Islands Pastoral & Industrial Show on this Saturday.