Expert assessment of the market right now

As we reach the end of the first quarter of 2023 give readers your summation of where the market is at right now from the point of view of those looking to sell.

Daniel Coulson, Chief Executive, Ray White New Zealand: When market conditions are predictable (either up or down), people are able to make calculated decisions. It is when there is uncertainty that those decisions become much more difficult.

Twelve months ago, there was plenty of speculation as to whether the market conditions being experienced were a blip on the radar or here to stay for some time, would the market rebound, or would it see accelerated downward pressure? Fast forward to today, and both buyers and sellers have had more opportunity to absorb the conditions and make considered decisions.

We are still seeing the fundamentals of a good home in a good area attracting strong interest. Properties that may pose a challenge for purchasers, such as a significant renovation or redevelopment, compromised position or title-related matters, could expect a more critical eye from potential buyers.

Days on market have continued to increase right across New Zealand. Typically, if a property remains on the market for longer than the average, a buyer may begin to question why that is. We would suggest that an owner today should be employing a strategy that maximises their exposure over a condensed period of time. This will mean that the owner will see the most benefit from capitalising on the interest that is generated when a home first hits the market for sale.

Overarching all of this, though, is that today, the relevance of a good salesperson, strategy and agency representing your home is more important than it has been for the past decade. Today’s market is not seen as one to take a risk in when it comes to those three factors.

Bryan Thompson, Managing Director, Harcourts New Zealand: The market across New Zealand has been progressing through a well-recognised period of adjustment post the sugar rush of cheap post covid funding.

Both sellers and buyers are coming, or have come, to recognise the ‘‘new norm’’ regarding the demand supply equation in play right now, so for sellers the critical actions remain as always. Select a great agent who you can trust and who is part of a team that has a proven track record of success. Invest in a strong marketing campaign that will attract every potential buyer in the market and then push forward strongly and positively toward your sale.

As you move towards sale day perhaps the defining factor between success and disappointment, (if you have followed the advice given earlier in this answer), will be the work you and your agent have done to make sure you both fully understand the level of interest from a price perspective, that your property has generated. If you don’t, then as a seller you are running the risk of making a poor decision. The age-old truism that facts defy belief rings very true in real estate, so when you make the final decision to accept or reject an offer - make sure you do so with all available facts at hand. If you don’t, then you’ll be relying on opinions and beliefs. That’s what I would describe as guessing and not a recipe for a great outcome, I would suggest!

Chris Farhi, Head of Insights, Data & Consulting, Bayleys: Across New Zealand sales volumes have been low during early 2023. This will be reflecting both the calmer market and the extreme weather events at the start of 2023.

The February house price indices showed potential signs of stabilising prices in Auckland and Wellington, but we’ll need a few more months of data to determine if the trend is actually changing. The most likely reason for a change in trend is that prices have already reduced and there is less uncertainty around the pathway for interest rates.

Activity across higher end properties has remained reasonably resilient. Whilst there has been some downward price pressure, demand will always exist for properties with desirable fundamentals.

How do you see the market from a first home buyer’s perspective?

Bryan Thompson, Harcourts New Zealand: Warren Buffett, perhaps the most consistently successful investor on the planet, has always said, ‘‘be timid when others are brave, and brave when others are timid.’’ Right now, there are more properties available for sale than we have seen for a long time, prices have eased from historic highs and employment remains strong, yet demand remains weaker than when prices were at historic highs.

This to me is a classic time for first home buyers to take action and be brave! We are seeing this activity from astute first home buyers with anecdotal feedback from our team on the ground they are in the market - so my advice to all first home buyers is simple, do your homework on your financial capacity with a qualified mortgage advisor, research the market and identify properties which you both like, and can afford. Be flexible on both location and property and then get active, now is the time to be brave; the timid will not inherit the world!

Chris Farhi, Bayleys: Our agents are reporting a lift in enquiry from first home buyers coming in 2023.

On the flip side, enquiries from investors has generally be lower. We’re attributing this to the changes in tax regime coming into effect – particularly the changes to interest deductibility.

Daniel Coulson, Ray White New Zealand: Throughout most of 2020 and 2021, purchasers were treated to the lowest mortgage interest rates on record. Conversely, however, the ‘upfront cost’ or price of a home was increasing at unprecedented levels also. Fast forward to today - we have higher interest rates and a (comparatively) lower upfront price for a home. We know that interest rates are temporary and will continue to fluctuate; home ownership, however, is as permanent as you would like it to be, and the price you pay today will be ‘locked in’.

Today’s prices may be the best opportunity to get into the market if you can withstand the short-term pain of the current interest rate environment.

There will be factors that influence the availability of property throughout the year, such as the election, where we typically see fewer homes coming to market in the lead-up, so you may find less choice as the year goes on.