For those potential home buyers looking to take advantage of the 'cheap money' available through historically low floating interest rates, the good news is that the status quo is set to continue and there will most likely be no rise for the foreseeable future.
What was looking like a likely OCR price rise in September has been put on ice and we are forecasting an extended five to six-month
OCR breather.
New Zealand is now well on the way to recovery from the recession of the past three years, while conversely, global confidence has taken a hit during the early part of August - sparked by the credit downgrade of the United States.
Confidence is critical to movements in the New Zealand residential property market - both in volumes and pricing. Many home buyers are nervous about what they are hearing on the other side of the world. Many sellers, as they have historically always done, are holding off listing their properties until spring. The result is that we have a supply/demand imbalance.
New Zealanders' attention will be elsewhere this spring - most notably on the Rugby World Cup which will take a six-week slice out of the calendar, followed by campaigning for the election. As a consequence, we predict there is a very good chance the 2011 spring residential property market will be considerably more subdued than we have seen previously.
Now is an ideal time for homeowners to begin marketing their properties for sale - capturing international interest generated by the Rugby World Cup, as well as capitalising on an oversupply of cashed up buyers wishing to get into a new house in time for Christmas.
Peter Thompson
Managing director Barfoot & Thompson
The Auckland property market is quietly ticking over at present and is in that rare state where all the traditional influences are balancing each other out. It is a good time to sell a property as there are buyers in the market, and their choice is limited. At the same time, buyers are not prepared to pay over the top, which means prices are moving in a tight band.
This balanced state is likely to stay with us until the end of the year or until confidence in economic stability returns. Once it does, it is inevitable that Auckland house prices will increase, although these are likely to be incremental.
The driver for this is the growing Auckland population, fuelled by immigration from other parts of New Zealand and overseas, as well as natural growth. The banks are also lending again and there is growing competition to lend in the housing market.
Auckland is on a growth path that will continue to attract a larger population. The existing stock of dwellings is totally inadequate to meet demand. Auckland is such a large and diverse area that it should not be thought of as one market. There will be significant variations in terms of numbers of homes sold and their values
across suburbs and geographic areas based on factors such as schools, transport and work opportunities.
Meanwhile, a fundamental change is taking place across the region as the metropolitan area progressively moves from being a combination of separate cities and districts into one 'super' city. New living hubs are being formed, public transport is becoming
more important and new travel routes being established.
Carey Smith
NZ chief executive Ray White (Real Estate)
The real estate market has been favourable towards sellers in the last quarter and
this has mainly been due to the limited number of new properties presented to the market. Buyer expectations have remained consistent, although there are increasing signs that due to the lower selection of properties on the market, prices are rising and days on market are reducing. There has been a substantive lift in auctions during the past quarter, with Ray White Group auctions lifting by 26 per cent and the under-hammer success rate going from 58 per cent 12 months ago to 71 per cent this year on an increased number of properties.
The further indication by the Reserve Bank Governor that interest rates are to remain at the current low level, until at least December, has given further stability to the market and also provided confidence for buyers in the decision making process.
During the past fortnight there has been a lift in the number of new properties coming onto the market and we see that this will continue over the spring period, as houses are sought after by purchasers who have been waiting. For investors, there is a consistency in the rental market with low vacancy rates continuing to trigger slight increases in
rental averages. The Rugby World Cup is also taking up surplus accommodation and this will assist rental investors in the short to medium term.
The outlook is for stronger numbers of sales throughout New Zealand and this will be reflected mainly in the capital cities. Christchurch has now recovered 60 per cent of its market activity and, subject to any further events occurring, the overall Canterbury region will continue to show increased numbers of properties selling.
