Feature article
Market pulse check: Agency heads’ plans for an unusual December market
And prices are on the rise for some
After the election interrupting the normal spring/summer selling trajectory, the market activity is proving a little different from other years. We checked in with some agency heads to hear their plans.
The country’s real estate firms are making the most of the last few weeks of 2023 and playing catch up after an inevitable pause around the election in October. And the will is there on the side of both buyers and sellers to transact, is the collective consensus, with strong volumes of new listings coming through - though more would always be welcome.
Daniel Coulson, CEO of Ray White NZ, says that following the confirmation of the new Government in November, the energy’s back in the market again.
The company’s total nationwide inventory at the end of November was up 18.38% on the same time last year, and the company’s appraisals over the last couple of months (which typically precede a listing by a month and a half to two months) are 19% higher than this time last year. Daniel also anticipates a big wave of new listings in January and February.
For agents speaking to vendors wondering whether they should sell in December or wait until the New Year, Daniel says he’d be encouraging them to come to the market in December, with his agents positioned to sell deep into the month. Ray White has auctions running right up to and including 22 December.
“With a lot of property coming on in the New Year, I’d be saying to homeowners, ‘you’ve probably got a bit of a window here to sell’”, he says. Buyers will be motivated right up to Christmas, and, for vendors, it will be less competitive than the New Year.
To potential sellers his message is “launch online now and see if you uncover a buyer, have the property live and then if it’s not sold by the New Year, then launch a full campaign in January”.
If sellers have their house ready, Harcourts Managing Director Bryan Thomson, agrees that December would be the best time, rather than waiting for 2024.
“The risk is, if they wait until the New Year, they’ll get swamped by other properties. Pushing it out until the New Year is an easy decision but if they can be ready in the short term, going early is what the smart thinkers will be doing,” says Bryan.
Meanwhile his ‘gut feel’ is that there’ll be quite a lot more property transactions over Christmas and New Year this year. He believes this is in part because fewer people will be going away on overseas holidays given the economic climate. His sales force has also told him that they’ll be on deck later and returning earlier.
Marcus Phillips, Managing Director of mortgages.co.nz, the independent home loan information provider, supports the generally upbeat sentiments of agency heads. “The combination of additional listings hitting the market as we move into the summer months, the Official Cash Rate being maintained, and the stability from a newly formed government, means there’s an expectation of a busier start to the year than normal,” he says. Many mortgage advisers plan to work from early January as Kiwi return from their holidays seeking advice around their finances, he says.
According to its monthly mortgage adviser survey with economist Tony Alexander, advisers are continuing to see strong inquiry from first home buyers, and at the same time, demand from investors is rising with the new Government and the reintroduction of interest deductibility.
Auckland and Wellington leading the market revival
When it comes to buyer and seller activity, Wellington and Auckland are leading the charge, says Johnny Sinclair, National Director of Residential at Bayleys Real Estate. He believes Queenstown and Christchurch will be very active too.
“I think… there’s been a lot of people who have sat on their hands and said, ‘I’ve had enough, I want to move on with my life, I want to upsell, cross sell’ etc - and people are getting on with it.”
Bayleys has seen an uptick in listings over October and November across the country and the momentum is still going, with stock levels very strong for December.
Johnny expects a lot of deals to be done in the final week running up to Christmas.
“There’s motivation on both sides to do the deal,” he says.
UP Real Estate director Barry Thom is hoping more vendors will decide to sell this December and he has a good story to tell them.
Good, well-priced properties are selling quite quickly and the agency’s average selling price has gone from the high $1 millions last year to the high $2 millions this year thanks to more high end properties coming on, he says. There’s also more sales activity happening in the $3 million to $10 million price range.
“Those people have reemerged and are potentially prepared to have a go,” says Barry.
Wellington and Dunedin ready for a busy December and New Year
There’s been some concern that a strengthening Wellington’s property market may be hit by redundancies in the public sector under the new Government, but Ben Castle, Chief Executive of Tommy’s Real Estate, says he isn’t anticipating an immediate impact on the public sector workforce as this is still very much the review stage of how many people are needed in the various government departments. He expects house sales to keep going right up until Christmas and for activity to continue right through into the New Year.
The agency is seeing a good number of new listings coming through in December and open home attendance is high. One particularly spectacular property attracted over 150 people through on its first Sunday at an open home in December.
Traditionally, the capital is quite quiet over the Christmas New Year period but it’s unlikely to be this year, says Ben. A lot of Wellington civil servants will be kept busy working with the new coalition Government, so there will be plenty of people around to look at new listings, he believes.
In November, Tommy’s had around 70 properties under contract with 130 offers, which means that 60 qualified buyers who missed out on buying a property, are still looking, says Ben. If agents are talking to vendors who are unsure of when to make their move, they should talk about their current buyer pool and see if these potential sellers might be happy for them to bring buyers through the home off the market. “If they don’t line up right, then they can take it to the market in January and create some competition,” he says.
Meanwhile for the real estate market of Dunedin it’s like Christmas already. The city has a healthy supply of listings coming on in December and an ever-growing number of listings confirmed for January and February.
“What this increase of stock levels is doing is freeing everything up, for people wanting to upgrade, they’ve got some choice, they can make a decision on their own place,” says Joe Nidd, principal of Nidd Realty.
“We’re out of this gridlock where there wasn’t enough to look at. And people are transacting at all levels, from first homes, investment homes to trade up homes,” he says.
Despite a generous supply of homes coming on the market, the Dunedin markethas also seen a substantial drop in days to sell. According to REINZ, the days on market have more than halved from 63 days in March 2023 to 31 days in October, Joe says.
