‘Rampant’ market surprises sellers
City real estate leaders returned from holidays to a market at unprecedented levels of activity as buyers compete for properties, which often sell $100,000-plus above recent valuations.
According to the Real Estate Institute of New Zealand January analysis, Hamilton’s median house prices had reached $730,000 – up 5 per cent on the previous record median high of $695,000.
Lodge Real Estate general manager Jeremy O’Rourke said sale prices are catching sellers by surprise. ‘‘We are required by law to give an appraisal. But values are becoming hard to measure. Some sellers are overwhelmed. Some in our auction rooms get quite emotional when they see what they get for their property. There was nothing in the market to suggest we would hit this level. The market is incredibly busy; we are really short of listings. We expect more to come on the market as people return from holiday.
‘‘And it’s not just first-home buyers. Houses in the $1 million and higher range made up about 4 – 7 per cent of the market before
Christmas but are now about 16 per cent. This shows some people are taking the opportunity to trade up, and a lot of people are taking the opportunity to exit the family home and move into a retirement village, and this releases properties.’’
O’Rourke said booming prices showed up in the auction room. One well-presented Braid Rd property attracted an opening bid of $790,000 but sold for $960,000.
Harcourts Hamilton Central
City manager Campbell Scott said there was huge demand across all price ranges and in all suburbs.
‘‘It’s interesting how quickly interest has come back after Christmas. Buyers were active over Christmas. We don’t usually see an increase until the end of January but we had 381 sales in the city in December and 368 available (listed) by January 25. About half that are under construction or under contract already so we really only have about two weeks supply; the tightest I can recall in 20 years. ‘‘There’s no sign of it slowing in the short to medium term. Unless the Government or Reserve Bank does something to reduce demand or eases compliance to create a greater supply. There is a lot of land around Hamilton to be built on, if developers were allowed to. There’s not a lot of land for sale. What is gets bought quickly.’’ Scott said a well-presented but ‘‘ordinary’’ Dinsdale property was valued in September at $629,000, attracted 92 groups of viewers in four days and offers in the high $700,000s.
Lugtons Real Estate managing director Simon Lugton said they had good numbers of listings, but demand is outstripping supply. ‘‘The end of the year was rampant. Sales were 51 per cent up on the previous December. We’ve given up valuing properties. The market has just taken off. The time to sell has been trending down; usually it never drops below about 20 days but it’s below that about half the time.’’
He said continuing population growth and a rise in people who prefer to live on their own had created more demand for one and two-bedroom apartments. And first-home buyers are not so fussy, ‘‘they just want something as a stepping stone.’’
Late last year investors seem to have taken over from firsthome buyers which could encourage a rise in the LVR (Loan to Value Ratio – the amount the investor needs to find before the bank will lend the rest.
ANZ announced it would raise LVRs for investors to 40 per cent late last year. Other banks are considering their next moves.
REINZ’s January analysis shows a record low pool of properties for sale in NZ, continuing the pressure on house prices, with a new record median price for the fourth month in a row. Median prices across NZ increased by 19.3 per cent from $628,000 in December 2019 to a record $749,000 in December 2020.
Every region, except Auckland and Gisborne, had their lowest levels of listings ever.