The real estate landscape in Lower Hutt as Spring approaches is experiencing some interesting shifts and trends:
1. Influx of Properties on the Market: Spring traditionally brings a surge of properties hitting the market, and while this trend will likely play out, there is a subtle shift in property sales due to the upcoming election and the associated uncertainty.
2. Increased Property Prices: Compared to the same period last year, there has been a slight increase in the prices properties are changing hands at. This may be attributed to the fear of missing out (FOMO) on a property purchase rather than the fear of overpaying (FOOP) for a property. The tight supply of new stock is putting buyers in competition with each other.
3. Property Appraisals on the Rise: Our agents have seen a notable increase in property appraisals in recent months, suggesting a potential influx of homes entering the market in the coming months. This could cater to some of the demand from eager buyers, although it is hard to say if it will be enough to keep up with the number of immigrant buyers we are seeing.
4. Dip in Sales Activity: Recent sales data from REINZ shows a dip in sales activity compared to the previous year, with 91 sales in the past month compared to 101 during the same period in 2022.
5. Balanced Market: Despite the dip in sales activity, the year-on-year decrease of -8.9% in the median property prices came to an end around 8 weeks ago in Lower Hutt stabilizing at $700,000. We are now in a balanced market where neither buyer nor seller has much advantage over the other.
6. Extended Days to Sell: The median Days to Sell has extended to 52 days, indicating a slightly prolonged selling period during the winter months. This statistic surprised us as anecdotally we are experiencing multiple interest within days of bringing new homes to the market.
7. Strong Interest from First Home Buyers: We continue to observe strong interest from first home buyers who actively attend open homes. This could be a result of more affordable prices, in line with current market conditions and the easing of bank lending requirements.
8. Decline in Investor Buyers: There has been a decline in investor buyers, which may be influenced by the loss of income from non-deductibility of interest expenses, on-going Healthy Homes upgrade costs, increasing rates and insurance costs outstripping rent increases, lending restrictions on investors, the slowdown of new homes being built, and the uncertainty associated with the upcoming election. Interestingly, some seasoned investors have been buying in the last six months.
9. Decrease in Enquiries from Overseas Buyers: Enquiries from overseas buyers have decreased, but there has been a noticeable increase in local buyers becoming New Zealand Residents which qualifies them to buy without restrictions.
In summary, while the market in Lower Hutt has gone through a tumultuous two years, it appears we are out of that and are now seeing a pattern of stability in property prices. Sellers are generally pricing their properties realistically, making the market attainable and attractive to first home buyers. This has a ripple effect through the market with homes in the more expensive suburbs in short supply and selling fast. The upcoming election and economic factors may continue to influence real estate trends in the region, but it is hard to see how they could overpower what is likely to become a housing shortage greater than we were experiencing at the end of 2019.
