We’re Holding Our Collective Breath

Director of City Realty Group, Daniel Horrobin says: “There are sufficient positive indicators now to instil confidence the market generally is gaining momentum, but still we hold our breath”.

Our very own Loan Market partner Jamie Maclennan remarks “As last month’s cut in the official cash rate (OCR) continues to wash through the finance and property markets, all eyes are on the Reserve Bank of New Zealand’s (RBNZ) next monetary announcement on October 9.”

Early in September, economist Tony Alexander reported positive signs. “This is my first column for the month, which means I have in hand the results from my survey of real estate agents around the country. The data show us that the upward momentum in residential real estate, which was apparent even before the August 14 easing of monetary policy, has strengthened. Whereas two months ago a net 35% of agents said that they were seeing fewer people attending open homes, now a net 42% say they are seeing more. The late-July result was 11%.”

“Startling proof to support the above survey results,” adds Daniel, “are our own open home visitor numbers in the Central City. September’s touch over 400 open home visitors was up a staggering 98% on August”. 

Realestate.co.nz identified key areas of interest. “Unprecedented price stability offers certainty for buyers and sellers. In fact, with average asking prices remaining flat, it marks the longest stretch of price stability since records began 17 years ago. Spring stock levels are at the highest they have been in a decade.”

“In our Central City market,” says Daniel, “the number of properties available for sale on Trade Me has finally shown signs of increased activity with numbers cracking the 600 mark after dipping somewhat over the winter months. That is likely a result of a general growth in confidence given recent events and maybe the prospect of warmer months ahead.”

Tony Alexander’s mid-month survey of mortgage brokers provided an interesting insight. “A net 51% of brokers report that they are seeing more first-home buyers looking for advice, while a net 33% say there are more investors in the market. Two months ago these results were -7% and +9%, which tells us that in response to the change in the interest rate outlook, it is young buyers who feel more greatly motivated to consider a home purchase.”

“Are investors back?” queries Daniel, focussing on a core element of our Central City apartment market.

Interest.co.nz reported on 25 September: “Investors had a bigger share of mortgage money than first home buyers for the first time in about two-and-a-half years last month.”

There is however still some pain out there as economic conditions and interest rates continue to prove a challenge.

Earlier in the month it was reported: “Mortgagee sales have hit a post-Covid high in new data released to OneRoof, according to the latest figures from the Reserve Bank (RBNZ).”

Analysis by property insights firm CoreLogic found there were 189 mortgagee sales in the 12 months to the end of June this year – up 81% on the previous 12 months and more than triple the tally for all of 2022.”

On a more positive note, Daniel says: “We have nearly 30 auctions already booked for October in our Queen Street auction room and counting. That is a very positive sign, reflecting an REINZ report earlier in the month confirming signs of increased confidence, optimism and activity compared to the previous year. In fact, the number of auctions we have booked already for October is nearly double those we conducted in the same month a year ago.”

In the tenancy space, Tony Alexander reported in a NZ Herald OneRoof article on 25 September: 

“Good tenants are now a lot harder to find than before. At this time last year a strong net 24% of landlords reported that they were finding it easy to secure good tenants. Now, a record net 22% say that finding such people is hard.”

Our very own Super City Rental division confirms that is the case in the Central City apartment space also.

“We are optimistic,” says Daniel, “despite holding our breath, that an upturn is on the horizon as the race to Christmas gains momentum also.”