Soft market offers opportunities

If you’ve been thinking about selling your house to move to a bigger place, now might be a good time to try, new figures from Corelogic suggest.

The property data provider looks at the gap in median values between three and four-bedroom properties as a proxy for how much people would need to pay to ‘‘trade up’’ from a starter home to their next house. It found that in central Auckland, Waitākere, Manukau, central Wellington and Dunedin, the price difference had become smaller, year-on-year.

The momentum of price increases had vanished, and all areas had a smaller ‘‘trade-up’’ premium than last year.

Dunedin had the smallest trade-up premium at $154,000, compared with $156,000 a year ago. ‘‘Clearly, it still involves quite a bit more equity (and presumably debt in many cases, too) to move from a three- to fourbedroom property in most parts of the country,’’ Corelogic chief property economist Kelvin Davidson said. ‘‘Aside from Dunedin, the gap is at least $202,500 (Upper Hutt) in each of the other markets covered here, and at least $300,000 in Porirua, Rodney, North Shore, Manukau, and Auckland City. And of course, with higher mortgage rates, there’s an increased regular debt servicing burden, too.

‘‘It wouldn’t be a surprise to see the trade-up gap generally continue to shrink in the coming months.’’

Davidson said that if everything was to fall in price by 10%, the bigger houses that were worth more to begin with would drop in price by a larger amount in dollar terms. When the market was at its most frenetic, buyers were advised to minimise conditions on their offers, but now it was also more likely that an offer that was conditional on the sale of a property could be accepted, he said.

Davidson said that while people were often reluctant to put their houses on the market when prices were falling, they were usually buying and selling in the same market. ‘‘People forget that the next house will have fallen in value just as much, if not more.’’

Helen O’sullivan, chief executive of property firm Crockers, said people planning a move should have their properties valued independently, and be realistic about how long it could take to sell.