The May statistics are out and there are some positive signs as things are starting to move up somewhat. The volume of sales increased significantly throughout the area in which we operate. In Rotorua 81 properties became unconditional, up from 61 in April. That’s a very strong 32 percent increase. In Tauranga 105 properties were reported as sold, up 23% from April and on the Mount side 83 properties were sold unconditionally – up from 62 in April, at an increase of 35%.
Other activity in all the areas in which we operate was up, with more people attending open homes, more multiple offers on properties, more pre-auction offers and more attention in the auction room.
These activities do not necessarily mean an immediate price increase. Typically, that is determined by supply and demand. In fact, in May all three areas showed a reduction in the median sales price. In Rotorua the median was ever so slightly back to $600,000 from April’s median of $605,000. In Tauranga the median price dropped from $880,000 in April to $835,000 in May and on the coast, being Papamoa and the Mount, prices dropped from $925,000 in April to $885,000 in May. Average days on the market for properties from list date to unconditional dates typically sit between 5 and 7 weeks.
Putting the statistics aside, there is renewed confidence in the market where we are seeing first home buyers returning, and this will account for the slight decrease in the median sales price. My advice, if you are a first home buyer, is to act now. In October there is this thing called a general election, and if per chance there is a change of government, a policy Labour implemented around landlords being able to claim mortgage interest against their income, may be removed and we will see the market flooded with investors again. While the ship is steady, don’t hold back.
As for sellers, we will continue to see the impact on homeowners of mortgages coming off fixed rates and moving repayments up significantly, in some cases tripling the level. More property will come to the market and there will be more distressed sales. If you are, or could be in this situation, be realistic with your expectations, invest in marketing your property far and wide, reaching a wide audience and let’s get you sold now. Even if you are not in that unfortunate situation, if you are thinking of coming to the market, do so now while there are less properties for sale. Remember, the more properties for sale, the more competition there is and the less you get for your property.
Buyers, now it’s your turn. Our sellers have listened to the market feedback on the value of their properties and in most cases are positioned to sell. Interest rates feel stable, and in fact, predictions are they will come back to between the four to five percent mark in the next two years. Get in now where it feels we have reached the bottom of the cycle, secure your rate for a two-year fixed term to give you certainly and enjoy being on or up the property ladder.
This is a market for everyone. It is a buyers’ market and a sellers’ market. It has a strong feel to it, and it means it is time to act now.
At EVES we would love to assist you in your real estate journey so feel free to give me, or any of our salespeople a call: eves.co.nz/our-people
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