Green shoots and the election effect
Some positive signs in the housing market in recent weeks have got people talking about green shoots, but an election is also on the horizon. We asked the big players in the market for their thoughts.
There is plenty of talk around of green shoots in the real estate market - what is your view of current market conditions?
Peter Thompson, Managing Director, Barfoot & Thompson:
The market is showing strong signs that it has hit the bottom of the price cycle and is ready to shake off its 19-month hibernation.
The clearest signal is in the number of sales being made, nationally and in the Auckland market. Invariably, Auckland sets the trend for the rest of the country, and in August Auckland sales increased over those in July by 7.3%. Also, the number of days taking to sell a property in Auckland year-on-year fell by seven days to 41 days.
The median sales price in Auckland in August increased by 2% to just over a million dollars.
At this stage of the housing market recovery, canny observers will be more focused on sales numbers than prices.
Bryan Thompson, Managing Director, Harcourts New Zealand:
We are seeing, across most marketplaces, an increase in buyer confidence and urgency.
This is displayed through greater attendance at open homes and in auction rooms. Sales numbers are climbing from the historically low levels of the last 12 months with this set to gather pace as the expected spring listing flush comes to fruition.
Post election day on October 14, assuming we have a clear outcome, we expect the positive mood of the real estate marketplace
to continue to grow momentum.
Daniel Coulson, Chief Executive, Ray White New Zealand:
Today’s market conditions are more normalised after a period of uncertainty across most New Zealand markets for the past 12 to 18 months.
While there is elevated competition for property being offered for sale today, this is partly a result of a lower level of new listings. Pricing remains difficult to predict, and in most markets, today’s values are still off the peak achieved in late 2021.
We have recently experienced higher competition at auctions, with an average of 2.8 registered bidders per property offered for sale over the last 28 days. Equally, seller appetite for auction has also increased, with 25.25% more scheduled auctions over the same period compared to 12 months ago.
What effect do you think the election (not necessarily the actual result) will have on the market? Do buyers and sellers take a wait
and see approach or is it business as usual?
Bryan Thompson, Harcourts New Zealand:
Elections always have an impact on the ‘mood’ of the market, but not always the same. Humans hate uncertainty so in a year where an election outcome is uncertain people tend to hold back from making significant investment decisions such as a real estate purchase. In other years when an election outcome looks more certain the ‘holding off’ is less pronounced.
In 2023 there appears to be, currently, less holding off as polls predict a lopsided outcome on election day. We will wait and see what the actual outcome is and what post-election information and economic moves may be but right now buyers seem to be in a “get on with it “mood and that is understandable!
Daniel Coulson, Ray White New Zealand:
Previous elections have seen decision-making on both sides of the transaction delayed from the preceding month
or so until an outcome had been decided. Ultimately, this means the more ‘clear cut’ a result is expected to be, the less disruption it will likely have on market activity. Despite this, Ray White has seen 7.65% more property being brought to market over the past four weeks than 12 months ago, and the number of appraisals being undertaken on prospective sellers homes is also 11.86% higher - perhaps indicating an increased level of property coming to the market after the 14th of October.
Peter Thompson, Managing Director, Barfoot & Thompson:
Elections have less effect on the housing market now than they once had when less current economic data was available, and the Reserve Bank was less independent than it currently is. However, human nature makes us cautious, and the election will still have a modest dampening effect on activity.
The market is ready for an uplift and, come November, regardless of which political point of view prevails at the election sales numbers will increase and prices will edge up. November’s sales figures will also be assisted by the normal rise in activity in the lead up to summer.