LJ Hooker Home Smart Newsletter

Market update: supply grows, demand eases

The tide is changing for the property market as the flame that has motivated selling activity in recent times is starting to diminish.

The latest data from the Real Estate Institute of New Zealand (REINZ) shows a continuation of the slowdown in the property market, noting that prices have eased while inventory levels have increased.

Annually, the median residential sales priced nearly eight percent since March 2021, from $825,000 to $890,000 in March 2022. However, the seasonally adjusted figures showed a decrease of 4.8 percent, indicating a weaker price increase than expected moving from February to March.

“Over the past three months, we have seen a shift and the market is now settling into this phase of the cycle, ” REINZ chief executive Jen Baird said. “The last two years have benefited from an exceptional COVID-19 boost. Following this period of significant activity and growth, prices are easing and the market is returning to a more settled pace. ” “While we continue to see prices increase annually —in all but one region — the rate of growth is slowing, sales activity is down and the median days to sell is up. We ’ re seeing the market moderate as people settle into this phase of the property cycle. ”

rate by 50 basis points — to 1.5%. The double rate hike will do little to alleviate concerns and rather see the market slow further as buyers reassess their ability to meet higher mortgage repayments should the dial be turned up further, tempering their spending.

“As the market shifts to a new pattern, we note volatility across regions. The data shows variation across regions and TAs within those regions. Last month, we saw strong prices in Otago, Southland and Canterbury, in March these regions are down — a reflection of what is happening across the country.

“House prices tend to be more sticky when decreasing than increasing, which is what we are seeing now. While market sentiment has quickly shifted, vendors are slower to adjust their price expectations. As demand drops, vendors tend to choose to wait longer to sell their property rather than sell below those expectations. Those who must sell often have to drop their price to meet demand. That tends to be the general experience at this stage of the property market cycle where the market power is leaning towards buyers, ” Baird said.

Tighter lending criteria, LVRs, increased interest rates and inflation have reduced the pool of buyers who are ready and willing to pay market prices, Baird said.

“The increase in interest rates over the past months presents one of the greatest impacts to the market. Yesterday the Reserve Bank increased the official cash

Buyers will often get a property inspection to reveal any unwanted surprises that may mean additional costs they did not budget for.

But sellers should not just leave that up to the buyers, if you get a building inspection done before your property hits the market it will uncover whether you have mould, leaking pipes, electrical wiring issues, water damage and potentially more. With this information in hand, you as the seller get the chance to set yourself up for a more successful sale.

So why should you consider a pre-sale property inspection?

Get more interested buyers

As a seller, you want to attract more interested buyers, and with a property inspection report provided upfront, it gives buyers a comprehensive overview on the general condition of your property.

This gives buyers more confidence your property has no issues they would need to deal with, or it gives them confidence that work that needed to be done was done properly. All those details would be outlined in this report, and buyers will be able to proceed with confidence knowing exactly the state and condition of the home they want to buy. With the report in hand at the beginning of your property selling journey, it could also accelerate the deal process as you can address issues beforehand. This would avoid delays and setbacks that could occur during the negotiation if unexpected problems cropped up from the buyer ’ s property inspection.

Gives you understanding of the current conditions of your property

After a thorough inspection under the floorboards, in the ceiling and everywhere else around your property, you will have an accurate understanding of its condition. During this process, minor and major issues, such as cracks and drainage problems, can be noticed and easily fixed to avoid bigger problems down the track.

With a professional inspection you can correct any issues right away. This gives you an advantage during price negotiations, allowing you to back up your claims about the condition of your property with an independent and expert report.

Also, with a clear understanding of your property ’ s condition, you have a better picture to determine its value for an accurate and realistic expectation on where to set your price range.

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With a complete property inspection, you will get an insight into future costs with a high degree of accuracy. Ensuring you and the future owner understand when various systems, such as piping and plumbing, may need to be replaced.

Also, it could be helpful to get these systems assessed for wear and tear to understand their expected lifespan. This gives you confidence that these systems are still in good working order at the time of sale.

Whether you sell or not, this information helps you better budget and plan for these costs, as well as help during negotiations. You might end up having a faulty system replaced before listing your property. And for those that are in good working order and do not need attention, your inspection gives you the opportunity to highlight this fact to buyers and potentially get you a better price. You will also have a solid foundation for answering any questions that a prospective buyer could have. By being able to reference the view of an independent professional inspection report, you can give buyers more confidence and encourage them to make better offers and transact more quickly.

Rest assure - you have peace of mind

With a detailed report full of critical information on the ‘health’ status of your home, you can be sure to have peace of mind. When you know your home is structurally sound and in good condition, you can attract higher prices.

With an inspection that puts your property in the clear, you can start marketing your property and negotiate with confidence, knowing that prospective buyers won ’t find any issues because you have turned over every rock.

Additionally, if any problems do crop up from the buyer, you will be in a position where you will be able to sort them out swiftly and, on your terms, as they will not be a surprise. But with a house that is move-in-ready and with a clean bill of health, you have put interested buyers into a comfortable position where they know they can put in an offer with ease.

Firm up your expectations

A correct and accurate perspective of your property ’ s value gives you added confidence during the selling process. With a comprehensive property report, you will be able to set your own expectations around the price and the sale of your home with confidence.

Why get a property inspection before you sell?

Understand your property ' s condition and make any needed repairs before going to market Be aware of future costs a new buyer may have to factor into their decision To help you get an accurate perspective of your property ' s true value, giving you confidence during the selling process Gives you peace of mind about the 'health' of your home

The information contained in this publication is general in nature and is not intended to be personalised real estate advice. Before making any decisions, you should consult a legal or professional advisor. LJ Hooker New Zealand Ltd believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation contained in this publication on the date of this publication. Nothing in this publication is, or should be taken as, an offer, invitation or recommendation. LJ Hooker New Zealand Ltd accepts no responsibility for any loss caused as a result of any person relying on any information in this publication. This publication is for the use of persons in New Zealand only. Copyright in this publication is owned by LJ Hooker New Zealand Ltd. You must not reproduce or distribute content from this publication or any part of it without prior permission.