Lower interest rates have sparked a spring resurgence in the housing market, according to Chris Robinson and Alexia Stoddart of Tommy’s Real Estate.
Chris notes that there’s a noticeable increase in positivity among buyers, coupled with a greater sense of certainty.
Although the process of obtaining finance and securing lending is taking longer, with more questions being asked, buyers are ultimately succeeding in securing their funds.
Alexia observes that both banks and buyers have responded swiftly to the Reserve Bank’s decision to cut the Official Cash Rate to 5.25 per cent.
This has led to a rise in attendance at open homes, particularly within the price bracket up to $1.2 million, where many three-bedroom properties attract first-home buyers. Chris adds that the lower rates will benefit all segments of the market, with the first-home buyer sector being the busiest. However, those looking to upgrade their family homes are also seeing this as an opportune time to make a move.
Alexia agrees, noting that many first-home buyers have been waiting for interest rates to decline, and this seems to be the area with the most significant increase in activity. Meanwhile, vendors considering upgrading to a larger home are also beginning to take action. Although winter was sluggish for sales, there was a notable pick-up in July when Wellington’s median price rose by 4.4 per cent year-on-year. So, what are the prospects for spring?
Chris explains that by now, it’s typical to see an upswing in new stock. However, stock levels are currently decreasing, which indicates that buyers are present. It will be interesting to see if there is a significant influx of new listings as the warmer months approach. For now, the lower levels of stock are creating more competition for homes.
Alexia adds that the quality of properties coming to the market is improving for spring. While there were previously many investor properties on the market, we are now seeing lovely family homes that are ticking all the right boxes for buyers. She notes that they are achieving great prices for properties, thanks to the quality of homes and the presence of multiple offers. The sense is that prices have bottomed out, the market is stable, and there are signs of improvement, making it a good time to buy. Alexia also believes that vendors have realised that the peak of the market isn’t returning anytime soon. However, when you buy and sell in the same market, you can still achieve a great outcome.
Chris echoes this sentiment, suggesting that the market has likely bottomed out. With cheaper mortgages now available, buyers should seize the opportunity before the market rebounds. The overall feeling in the marketplace is that interest rates will continue to decline and prices are likely to improve. Chris advises that now is a good time to try and enter the market, although he acknowledges that lending restrictions mean it’s still not the easiest time to secure funds. While there is more interest in homes, buyers are less likely to pay inflated prices. Good homes will always sell well, but vendors need to remain realistic in their expectations.
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