Effecting a sale this spring could yield some of the best sale results for residential property owners in 2023.
Market volatility has given way to a more stable pace of growth, and residential real estate buyers are taking notice this season. But what makes this time so special? Bayleys finds out why more sellers are considering a move this spring.
New Zealand’s residential real estate market sentiment is rebounding after record-low business confidence and nearly 18 months of contractionary sale results.
Backed by high migration, a growing supply-demand imbalance, and the broad consensus that economic conditions are improving, current market fundamentals support growth, giving sellers their first opportunity in as many months to ink a sale this spring.
Reserve Bank (RBNZ) lending data from June shows new mortgage commitments have edged up slightly year-on-year. This dynamic is aided by the recent easing in lending criteria through the Credit Contracts and Consumer Finance Act (CCCFA), as lenders adopt less stringent assessments of borrowers’ spending behaviour.
At the same time, a relaxation in Loan-to-Value Ratio (LVR) restrictions allows banks to extend lending to borrowers with less than 20 percent deposits, while cutting the minimum investor deposit rate from 40 to 35 percent.
Supportive policy changes are helping to give Kiwis more borrowing power. Ultimately, this adds to demand across the residential real estate market, reflected by the number of sales completed nationwide rising nearly 15 percent year-on-year in June.
Recent data indicates that demand across our housing market is picking up, as buyers previously sitting on the sidelines choose spring as the season to make their move.
Economic developments, including a stay in the Official Cash Rate (OCR), easing inflationary pressures, and more stable global conditions are prevailing good news stories for residential sales activity.
With transaction data trending up and value growth around the corner, Bayleys salespeople nationwide are seeing competition increase for quality properties. Recent successes in the auction room substantiate anecdotes of greater urgency from serious purchasers as clearance rates and active participation continue to lift.
For the last year and a half, purchasers have bid their time, hesitant to buy should prices fall.
Now, with greater clarity and a broad understanding that we’re past peak pessimism, more buyers are making a comeback – meaning more eyes are on property listings across the country.
The pressing need to get back in the game for current house hunters is further heightened by highly-publicised immigration trends, which have seen more than 72,000 new entrants add pressure to the already tight housing supply in the year to June 2023.
**HERE FOR A GOOD TIME **
Commentators say that despite renewed enthusiasm, the residential real estate market could quickly experience a turnaround as significant headwinds linger up ahead.
Stable pricing right now means the people transacting property are buying and selling at the same level. However, with a general election, chatter around Debt-to-Income (DTI) limits, and ongoing pressure on household balance sheets with mortgage lending rates much higher than before, we could see cynicism reemerge again next year.
Pundits say it takes a year and a half for monetary policy to filter through the financial system, and with an aggressive tightening cycle from the RBNZ designed to control inflation, some expect 2024 will see times get tougher for Kiwis – meaning we’re in a sweet sales spot for sellers to act now.
At the core of the housing market, there’s a fundamental need for Kiwis to buy and sell property, with the bulk of activity driven by family, employment or a shift in lifestyle.
Our instincts continue to play a significant role in the property market’s performance, with seasonal benefits set to support momentum in spring.
Longer daylight hours offering more exposure to sunshine increase mood and motivation, providing further incentive to make a move.
Where existing homeowners traditionally undertake add-value renovations, with some preparing their properties for sale, open home and auction attendance will rise, supported by prospective purchasers motivated to see homes in their best seasonal light.
Spring offers another reason to get up and go, with ‘deadlines’ providing a reason to seek an unconditional sale before the year and general election end.
If an optimal result is what you seek, Bayleys is better positioned to give your property the edge.
As New Zealand’s largest, full-service real estate agency with a network of 100 offices from the top of the North Island to the deep South, we leverage exclusive marketing innovations and homegrown service to maximise exposure and reel in the right buyer – time after time.
To hear more about your seasonal opportunities and how you can maximise momentum with Bayleys this spring, our residential real estate specialists welcome your call.