Autumn leaves its mark on houses
The seasonal nature of the real estate market has gone out the window in some regions, but may continue as normal in others, finds
The best time to sell a property has traditionally been spring, when buyers haven’t reached the stage of escaping to the bach, and are back from their three-week, mid-winter escape to Europe. Some houses simply can’t be made to look their best in the dark and cold of winter.
But that’s in a normal year – and we all know that things are far from normal right now. After months of prediction-busting house price rises, will we still see a cooling off of listings as the weather gets chillier?
‘‘Traditionally, we see property sales slow down in the colder months of the year, however, the property market has not followed the usual cycle since Covid-19 first hit New Zealand’s shores,’’ said Bindi Norwell, chief executive at the Real Estate Institute of NZ (REINZ).
‘‘I don’t have a crystal ball. My gut feel is the market is going to slow down anyway,’’ said Nikki Cruikshank at Tommys Real Estate Wellington.
‘‘The market rises for two years and then settles or steadies for five. We’ve had increases for four years now. I don’t think it’ll go backwards, but the growth rate will slow right back.’’
There are some regional variations, but real estate typically has its highest sales volume between March and May because that’s when properties marketed during summer are sold, according to homes.co.nz.
After that summer rush, sellers often wait until September to November before listing again, when their gardens can be shown in full glory. April can also present a particular challenge for family home listings, with open homes struggling to compete against school holidays, Easter and Anzac weekend.
Cruikshank said the cold weather can be a turnoff for buyers in places like Wellington, particularly if the houses are old and draughty. Sellers need to make sure the home seems ‘‘cosy’’ as soon as people set foot in the door.
But there are some good reasons to list in autumn and winter. With less stock on the market, the cooler months can generate more competition between buyers, and the opportunity to sell for a higher price.
North-facing houses with winter sun, or attractive underfloor heating, covered entrances and gas fireplaces can look particularly attractive.
Cruikshank added: ‘‘There are always people looking, particularly for family homes. There are never enough of them.’’
Economist Tony Alexander said nothing was ‘‘jumping out at him’’ to suggest that we will not see the usual seasonal pattern. ‘‘Even the latest lockdown probably won’t much alter sales as they might just shift to later in the month.’’
The March REINZ & Tony Alexander Real Estate Survey suggested a mild easing in some aspects of demand, and perhaps some more properties being brought to the market by investors.
But overall, with a net 88 per cent of agents still seeing prices rising and a net 86 per cent still seeing fear of missing out on the part of buyers, national shortages of listings are still a major concern for people trying to buy, Alexander’s report says.
Homes.co.nz chief data scientist Tom Lintern said the current property boom may have an impact.
‘‘With things the way they are, more people are holding onto their property, which may result in a different trend,’’ he said.
‘‘With the current sellers’ market setting records across the country, I expect the shortage of available housing stock and low cost of lending will ensure a strong demand for any home that comes on the market throughout the cooler months.’’
Debi Pratt of Tall Poppy real estate in Christchurch says she is ‘‘absolutely not’’ expecting a break.
‘‘If anything, it’s getting worse’’, she said. ‘‘I suspected sales might drop off once those new LVRs [loan-to-value ratios] hit, but we haven’t got an indication of that.’’
The agent for Christchurch North said last month was the busiest listing month she’s had in 30 years, and that, typically, Christchurch buyers and sellers don’t fret about the cold until April. ‘‘March is usually pretty robust.’’
She added: ‘‘I think people buy and sell because of what’s happening in their life, not what’s happening with the weather, but autumn and winter can be a good time to sell because there is a lower stock level.’’
In Auckland, managing director of Barfoot & Thompson Peter Thompson believes the market is likely to maintain sales momentum and strong pricing through to the end of June.
‘‘Typically, in Auckland, July to August sees a little less trading activity with prices easing before reviving towards the end of the year,’’ he said. ‘‘The Government has committed to taming rising property prices and until its intentions become clear, future price direction will remain unclear.’’
There are two quieter periods for new listings in Auckland, he says, in December and January, and for about eight to 10 weeks in winter and early spring. The latter coincides with the wet/cold snap, which can start as late as mid-June.
‘‘There is a good supply of new listings reaching the Auckland market from existing property, and new house and apartment builds, and this will continue throughout the year,’’ said Thompson.
There are a number of influencing factors occurring in the market currently that may impact the ‘‘normal’’ behaviours that we see, said Norwell.
‘‘The return of LVRs, the ongoing low interest rates, the low level of listings available nationally and continued high levels of demand will all influence what happens over the coming months.
‘‘Additionally, if the Government implements debt-to-income ratios this will also have an impact on the market.’’
Alert level changes in Auckland and across New Zealand may also impact sales volumes in the short term.