Bleak winter ahead for home buyers & agents due to lack of listings
Tommy’s Real Estate, Wellington’s leading real estate agency, is saying that a marked fall in listings is making it difficult for buyers. The company is pointing to a significant reduction in the number of properties listed for sale on the industry website realestate.co.nz.
Tommy’s managing director David Platt says, “Across the country properties listed for sale fell 24% in the last 6 weeks compared with the same month last year and the trend is reflected in the Wellington region where the number of listings fell 19% from 1,157 at the beginning of April 2016 to 941 by the end of the month.
“This is even more marked when the current listings are compared with the summer high point of around 1,600 in mid-March. While the number of properties for sale traditionally declines in autumn, the fact that they have fallen so markedly and so early is only going to add to the frustrations of those wanting to get settled before winter. Given that this is an election year, experience suggests that the brakes will go on the property market from August onwards in the lead up to polling day on 23 September,” David Platt says.
Tommy’s currently has around 240 listings across Wellington which they say equate to about six weeks’ supply and believe that anyone considering selling has a window over the next two to three months where market conditions will be advantageous.
Tommy’s Wellington City office signed 64 sales in April: 14 properties sold for more than $1 million and six for over $2 million; and 13 or 20 % of sales were to investors, which is down from 26% last month.
“This is significantly less than what would normally be expected for this time of the year and is reflective of the reduced number of listings.”
Tommy’s believe this is a reflection of the lack of suitable investment options available due to a shortage of listings combined with the greater difficulty in securing finance since the introduction of LVR restrictions last year.
David Platt emphasised Tommy’s still had a large database of buyers wanting apartments and houses across most price ranges. While only 12 of the month’s 64 sales were apartments, 18% of total properties sold compared with 20% last month, the apartment market has strengthened supporting the view that inner-city living with its easy access to work and recreational activities has growing appeal. Tommy’s expects this trend is likely to continue as commuters tire of the increase in traffic congestion in and around the Capital.
David Platt says the Wellington real estate market tends to revolve around people moving within our market rather than relying on people moving into the city.
“People recognise the opportunities to rebuy at the moment are very tight. Not so long ago they would have been happy to sell with a deferred 3-4-month settlement, knowing they would soon find something else. However, given the shortage of listings, they are now understandably wary of selling and becoming a spectator caught on the side-lines.
“The current shortage of supply will keep prices higher for longer, making it increasingly difficult for buyers and particularly first home buyers. This could be a particularly bleak winter not only for home buyers but also for real estate agents and companies, unless inventory levels pick up.
“While this situation seems unlikely to improve markedly in the foreseeable future, anything the Wellington City Council can do to expedite the development of new housing developments in the Churton Park/Johnsonville area and around Shelly Bay can only be good for Wellington and the housing market,” David Platt said.