Winter chill for housing market
A winter chill could be set to bite Hamilton’s property market with one industry leader saying the first signs of a slow-down are in the air.
But Lugton’s Real Estate managing director Simon Lugton’s view isn’t shared by others in the industry with competitors saying there is no reason to think a collapse is on the cards.
Residential sales in April were down slightly on the same period last year but well down on last month’s activity and while Lugton said it’s too early to say definitively, the result shows a cooling.
‘‘There is not a massive amount of property coming on the market,’’ Lugton said. ‘‘There are only 800 homes for sale which is not a huge amount of choice for buyers who are out there so I can see that limiting sales.
‘‘I can’t see a big flood of listings until spring time now.’’
REINZ data for the month of April shows 229 homes were sold in Hamilton, down four per cent from 238 homes sold in March and a ‘‘reasonably significant’’ 34 per cent compared to the same time last year when 349 homes were sold.
A definite cooling in Auckland saw its median price drop 0.6 per cent for the year while Waikato’s median price rose 2.5 per cent.
But Auckland’s market is an unreliable barometer, Lugton said, leading Hamilton’s market by 6 to 18 months.
The first three months in Hamilton were all up on the same period last year and April was the first month to dip below the 2017 numbers.
‘‘May will be very interesting and if it’s a bit subdued, it could be a quiet winter in terms of volume,’’ Lugton said.
‘‘If we are under 300 sales, we’ll be tracking a little bit behind last year (304) so it will be interesting to see if we can get up to that 300 which is a bit of a jump up from April figures.’’
Lodge Real Estate managing director Jeremy O’Rourke doesn’t agree. He points to the Reserve Bank governor Adrian Orr’s announcement last Thursday leaving the official cash rate (OCR) unchanged at 1.75 per cent as a reason for confidence.
School holidays and the Easter break which, this year, fell in separate weeks added to the seasonal slow-down.
‘‘You see it pull back in April and that’s very consistent with what we see in the market,’’ O’Rourke said.
‘‘It’s very much a seasonal trend that April is a much smaller month than March.’’
There were more sales in the first four months of 2018 than 2017 and the market is looking to expand despite investors being sidelined, he said.
The top end of the market is selling well and there are no signs of cooling in the first home buyer price band. Compared to 2017, 2018 is looking strong.
Buyers pulled back in the run in to the 2017 general election and the change of government kept uncertainty high.
That’s eased off now and buyers are happy to get on with the job, he said.
‘‘People said: ‘We’ve got them, we know who they are now, the world is not falling and even if it is, it’s just better to get on with things and they’ve gone back out there and started buying.’ ’’
Harcourts general manager Brian King said the fundamentals of the market haven’t thrown up any surprises.
Economic conditions in the city are favourable for continued population growth and that flows into the housing market. Rentals are running at 99 per cent of capacity. Hamilton is full.
‘‘It’s tracking fairly similar to last year,’’ King said. ‘‘We are getting a heap of multi-offers on good properties. It’s an eye-opener at the moment. I think we are lacking stock at the moment.’’