Buyers are encouraged to do due diligence before making a purchase. But what does this really mean? Brigitte Purcell from OneRoof’s Need to Know on What You Should Watch Out For.
Real estate agent activity fell by half after the foreclosure announcement last month, according to new home valuation data released today.
Nick Goodall, head of research at CoreLogic NZ, said agency work increased sharply after mid-August when Alert Level 4 was declared.
“Tracking early market indicators, like valuations generated by agents using Property Guru and RPNZ, shows that real estate agent activity has fallen 52% from the week before the foreclosure,” Goodall said.
The lockdowns made it harder for agents to find leads and for sellers to prepare their property for sale, he noted.
In Auckland, no open houses can be held, no auctions held at properties, no in-person appraisals at a house considered for listing, no secure on-site listing, and the offices of estate agents are closed.
If all of this translates to fewer listings, it would mean a further tightening of supply, which could put further upward pressure on prices as pent-up demand competes for limited listings, Goodall predicts.
But that shouldn’t last long. Even if this explosion did occur, it would likely be short-lived.
“In addition to the prospect of rising mortgage rates and the impact of stricter credit policies, it is important to take into account the burden of deteriorating housing affordability.
“However, as property values rise faster than income, the cost of buying a home will simply become out of reach for a growing number of potential buyers, especially as rising rates go. ‘Interest is starting to have an impact on the amount of money people can borrow, ”he said.
Comments come as Real estate listing site OneRoof.co.nz released its new house price figures, which showed the average New Zealand home value to be close to $ 1 million within three months until the end of August.
OneRoof’s new index, developed by its data partner Valocity, shows that there is still some heat in the market despite recent interventions aimed at slowing growth. Property values across the country rose 5 percent in the three months leading up to the end of August, bringing the national average property value to $ 983,000.
CoreLogic’s Goodall believed it was too early to see an immediate impact on foreclosure prices.
“However, we have the latest foreclosure and subsequent price surge to compare. The factors that led to this surge were many, and not all of them are present this time around. This has been favorable, it is unlikely to be stimulating, ”he said.
Last month, The Herald reported how Alert Level 4 was weighing on activity in the $ 1.5 trillion New Zealand housing market. About 1,600 weekly sales typically occurring this time of year are worth around $ 1.6 billion.
The exact amount of this reduction will not be known until the publication of official data in the next fortnight.
In the first week of August nationwide, excluding Auckland, agents sold 1,182 properties worth around $ 730 million, according to data from the Real Estate Institute. In the last week of July, Auckland agents made 623 sales worth $ 870 million. In the first week of August last year, Auckland agents made 612 sales for $ 630 million.
Ray White Papanui’s Christchurch agent Vanessa Golightly expected activity to halve during Alert Level 4, but economist Tony Alexander has warned to prepare for a wave of frustrated buyers as well after locking, the alert level causing further drought of property listings.
Data from the Real Estate Institute shows that more than 1,600 homes would typically have been sold in a week between mid-August and the end of August across New Zealand.
For example, three weeks of Alert Level 4 in New Zealand could affect nearly 5,000 sales, with a potential value of $ 4.8 billion.
Goodall warns that we won’t know exactly how the market was affected by the August and September lockdowns until we get this data.
Prices are already not rising as much as they were in many parts of New Zealand.
CoreLogic has shown today that house prices are not going up as much as they used to be. Its latest house price index showed New Zealand values rose 1.6% in August, down from 1.8% in July and 3.1% in April.
Rotorua’s values fell 2.8% for the first time in more than two years.
Queenstown’s values, which had risen 7.1 percent, rose only 3.4 percent in August.
Whanganui’s values, up 8.3% in July, fell back to 4.4% last month. Gisborne’s quarterly growth rate fell below 2 percent for the first time in a year.
Auckland did the opposite, with values increasing month-to-month, from 5% in July to 5.7% in August.
Data from the Real Estate Institute has shown significant growth in house prices in recent times.
Median residential real estate prices in New Zealand rose 25.2%, from $ 659,500 in July 2020 to a record high of $ 826,000 in July 2021.
Auckland hit a record median price in July, up 28%, from $ 918,000 last July to $ 1,175,000 in July 2021.
This growth was reflected across the region with six out of seven districts hitting record median prices: North Shore City ($ 1,375,000), Rodney District ($ 1,240,000), Waitakere City ($ 1,100,000), Manukau City ($ 1,075,000), Papakura District ($ 913,000) and Franklin District ($ 885,000), REINZ said.
Jen Baird, the chief executive, said house prices continued to rise in all regions.
“The past two months have shown early indications that the growth rate is starting to slow, however, it is too early to say if this is the usual winter easing we would normally see or if government intervention. in the market and the changes reported to the OCR begin to take effect.
“The strength of the market was again reflected in the REINZ Home Price Index, which hit a new high in the index nationwide. Every region in New Zealand hit a record high in July indicating that the underlying value of the property is holding up and likely to do so for a few more months, ”Baird said.
Barfoot & Thompson are due to release their housing data this week, followed by REINZ around mid-month.