Steady October for residential real estate
Embargoed Till 3:00pm 3/11/09
First National New Zealand: Steady October for residential real estate
October was steady in residential real estate activity as buyer interest from September resulted in a rise in contracts signed last month, First National’s monthly survey shows.
Key market activity indicators measured by First National monthly across its 70 offices include open home attendance, website property views, buyer enquiry, number of contracts signed, listing levels and sector changes.
October’s survey shows 70% of offices reported the same number or more contracts signed as September, and almost half reported more contracts signed than the same time last year.
Sales of top priced homes had slowed in 18% of locations, and another 12% reported the middle market becoming sluggish. Across the board lower priced homes were still attracting the bulk of interest.
Listing shortages continued to be reported by 64% of offices, but had eased from September particularly in Invercargill, Geraldine, Otaki, Richmond, Wanaka and Whangamata.
First National Group General Manager John Stewart said while early October reflected the usual school holiday slowdown in listing and sales activity, the past fortnight had seen some vigorous activity.
“Invercargill led the listings charge with more new properties coming onto the market in our office there than would usually be seen in two or three ‘normal’ months,” he added.
“Whangamata, as with many holiday and retirement markets, has been virtually inactive for the past 18 months but both listing and sales activity has returned with real vigour. This trend is being seen in most other similar markets”
Fifteen percent of offices noted rural activity was quieter than usual and places where rural and lifestyle enquiry was reported to have picked up was not matched by an increase in listings.
Several principals echoed the comment that where listings were plentiful, vendors expectations were rising too quickly for the market.
Stewart said buyers had been cherry-picking the best properties in all market sectors and suburbs this year, but leaving those properties less well presented.
“In some areas competition for these better options has seen firming of prices, but with more listings available now and seemingly a similar number of buyers, vendors would be well advised to analyse the competition before setting price expectations.”
“Vendors need to understand that over-expectation will kill enquiry very quickly in the current market.
“The old rule of ‘buy and sell on the same market’ prevails. It is important to spend time with your listing company researching just where your property sits amongst the competition, how best to present it and your plan regarding the next purchase.
“Buyers are being very cagey and researching properties, the local community, schools, population movement, transport and so forth with a precision not seen before,” Stewart said.
“Having said that, with well presented and sensibly-priced stock still relatively limited, some buyers are losing out through over-analyzing their options.”