Skip to main content

Property

The state of real estate

This is a summary of a presentation made by Bayleys’ Shaun Paterson at a recent meeting of the Mercury Bay Business Association (MBBA) held at Chesters Plumbing in mid-May. Over 60 attended and the overview presented was appreciated by the MBBA members.
 |  The Informer  | 

Shaun gave an overarching perspective on the state of Real Estate, not just a Bayleys one. Real Estate concerns all of us and The Informer asked Shaun if part of his presentation could be shared for a wider audience.

Having taken us through the past market cycle for context, Shaun started by giving the audience an overview of ‘big picture’ elements driving real estate dynamics.

1. Inflation – headed in the right direction but still carries risk with food, fuel and insurances examples of ongoing challenges for differing economic factors.

2. Interest rates – Have now been stable for 12 months. May be slower to come back than expected given the inflation position. This is likely to extend the flat market.

3. Finance becoming easier to come by with continued relaxation of CCCFA rules.

Turning to speak more specifically about the real estate market, one key theme was the amount of stock that has come into the market in the past 6 months.

Speaking of Whitianga, Shaun said, that when you searched Trade-Me for properties for sale on the 1st April, 2022, there were 60.

Now, if you search the same site, there are 195.

In mid-May this year, in the Mercury Bay Ward (from South of Kennedy Bay to Pumpkin Hill), there were 526 properties for sale on the market. 285 new properties have come into the market since Christmas. So buyers have choice and this is certainly driving a buyers market.

“Despite the increased supply, there is also more meaningful demand, when compared with last year. Notably 55 properties traded in the first quarter of this year in Mercury Bay, compared with the same period last year when the area was storm effected as well as facing the market headwinds.”

With these dynamics at play, although the market saw significant drops post its April 2022 peak, pricing has now remained stable for an extended period.

Interestingly, entry level homes between $600,000 and $900,000 have been trading well with first home buyers particularly active.

IN SUMMARY:

• Listings are high with a lot of choice for buyers. Further listings are expected as brightline rules are relaxed in July.

• More meaningful activity then previous 12 months BUT stock levels & sentiment to limit price recovery.

• Interest rates are stable and financing is becoming easier.

• Investors are expected to return through the course of the year with the return of tax deductability and relaxation of brightline rules.

• First home buyers continue to dominate – choice, value and government support.