Home buyers change tack
Prospective home builders in Nelson could turn to buying or renovating existing homes as supply constraints apply pressure, a property market expert warns.
Quotable Value’s latest property report, released yesterday, found prices in Nelson had fallen 1.5% to $869,465 in the past quarter.
Nationally, prices dropped 2.2% in the three months to the end of April.
Despite the drop, Nelson-Marlborough QV manager Craig Russell said Nelson’s prices were still 13.6% higher than at the same time last year.
‘‘But it has only increased by 2.9% in the last six months as the market has continued to slow during that time.’’
Vendors were starting to adjust their expectations to meet the slowing market, he said.
‘‘It’s been harder to sell properties at the lower end of the market compared with higher valued properties. This is partially due to first-home buyers and investors being hit hardest with increasing interest rates and tight credit controls.’’
He also warned that supply chain challenges and delays in obtaining titles for new builds could start impacting the market.
‘‘This may result in a number of prospective purchasers looking to buy an existing dwelling or renovating their existing homes.’’
QV general manager David Nagel said a big part of the price fall nationally occurred in late March and April, so the drop in prices was likely to occur faster in coming months, with vendors forced to price their properties according to the market.
‘‘This is a trend that’s likely to spread across all of New Zealand as listings continue to outstrip demand in the majority of New Zealand towns,’’ he said.
Andy Lee, owner of Nelson’s Fix It Building Services, which focuses on renovations, said he was fully booked to the end of the year and was still trying to catch up on jobs from last year.
‘‘I’m getting an awful lot of inquiries, but I’m that busy, and lack of staff, that I’m having to turn people away.’’
Any building job – whether a new build or renovation – was challenging at the moment due to a lack of building supplies, he said. He was working on a new build at the moment, but was still waiting for Gib board he ordered three months ago.
‘‘They still can’t give me a date.’’
Some framing timbers were also in short supply.
Because renovations could be unpredictable they could face delays, he said. ‘‘To do a renovation sensibly you need to have access to all the same products ... you sometimes come unstuck and need to change things because you’ve uncovered unknowns.’’
Some clients were talking about renovating after being able to save during the Covid-19 pandemic, but that could change as people’s financial positions shifted with rising cost of living, he said.
Nelson Harcourts sales manager Chris Davies said open homes were quiet, but there were still buyers out there for realistic vendors who priced their houses according to the market.
‘‘If people are buying and selling in the same market they can do so confidently.’’
The impact of increasing interest rates was being felt, with more listings coming on the market as sellers looked to move ‘‘sooner rather than later’’, he said.
A loosening of loan to value ratios was also seeing first-home buyers re-entering the market, which could bring average prices down as more lower-end properties sold.
There was a market for house and land packages, but they had to be priced realistically, he said.
‘‘Is the price right compared to the competition?’’
‘‘I’m having to turn people away.’’ Andy Lee Owner of Fix It Building Services