Buyers play wait and see game

Days out from the election, potential house buyers are nervously waiting in the wings.

Statistics from the Real Estate Institute of NZ show the number of homes listed in Hamilton during August was down 22 per cent compared to a year ago, with only 255 homes sold, down 29 per cent compared to last year.

The median house price in Hamilton during August 2017 was $546,500, up from $529,000 in July and up from $493,750 a year ago.

The looming election has put a damper on residential property listings and purchases in Hamilton, Lodge Real Estate’s managing director Jeremy O’Rourke said. However, a lift in prices and buyer activity is expected in the city post-election, he said.

‘‘We’re seeing a typical lull in Hamilton’s residential market activity which happens ahead of every three-year election cycle,’’ O’Rourke said.

‘‘What we also expect to see is an increase in buyer urgency from October and through to the end of the year. There seems to be more buyers actively looking to purchase compared to past election cycles,’’ O’Rourke said.

‘‘Open homes are busy right across the city. However, many of these potential buyers are in a wait-and-see mode primarily, we expect, due to the election. When you couple this increased demand with the fact that there are fewer homes available for purchase in the city, you have the perfect mix of supply and demand which is likely to result in a lift in the median house price.’’

‘‘We’re into spring and usually there is a flood of listings, which just hasn’t happened this year,’’ Lugton’s managing director Simon Lugton said. ‘‘Staff are doing a lot of appraisals, but it’s been slow getting these properties to come on to the market.’’

One little aspect of uncertainty is enough to make people pause, Lugton said. ‘‘It’s the closeness and uncertainty of this result.

‘‘Unlike National’s previous three terms, it’s not a foregone conclusion, and if Labour gets in it does mean some different policies.’’

Lugton said policy potential changes around capital gains tax and policies which affect the rental market like abolishment of letting fees and compulsory heating added a cost which might deter investors.

Harcourts chief executive Chris Kennedy said New Zealand is going through an uncertain time, which has impacted on markets right across the country.

‘‘This is driven by a degree I call the unknown,’’ Kennedy said.

‘‘People are looking for security of who is going to get in. If National get in, people know what they’ve got. If Labour do, people are going to be a little unsure, but in time they’ll reveal policies and we’ll get to know what’s going to happen and it will either drive the market or stop it even more.’’