New Zealand’s property market may be shifting from a buyer’s market to a seller’s market, driven by greater buyer demand – in particular from first home buyers taking advantage of favourable house price conditions – and lower-than-usual listings in what is traditionally the busy Spring selling season. Read on to find out more about the two important changes to market conditions that could see sellers regain the upper hand.
First home buyers leading the charge
One of the key driving forces behind a shift in the market is the influx of first home buyers. Slightly lower house prices and less competition has seen a greater number of individuals and families eager to take their first steps onto the property ladder, in what is considered by many to be the most favourable market conditions for first home buyers in recent years.
According to CoreLogic’s First Home Buyer report (released in May 2023), first home buyers accounted for approximately 25 per cent of the market share in the first quarter of 2023, up from the long-term average of 21 – 22 per cent. Across most markets in New Zealand, real estate agents – including those at Harcourts – are reporting an increase in buyer activity at open homes and at auction.
Lower available listings in a busy Spring selling season
Spring is traditionally a busy time for New Zealand’s property market, with a surge in listings matching an influx in buyers eager to find their dream homes. However, Spring 2023 has brought a unique scenario, in which a lower-than-usual number of listings is driving a greater demand for available properties.
This scarcity is fuelling competition amongst buyers, putting sellers in a stronger negotiating position. As sales volumes continue to rise while available housing stock shrinks to the lowest level in over a year – according to CoreLogic – the emerging mismatch between supply and demand will start to push up property prices.
Kelvin Davidson, CoreLogic NZ chief property economist, said, “August marked the fourth consecutive monthly rise in sales volumes, and while the increase is off a low base of around 60,000 annual sales versus a longer-term average of around 90,000 annual sales, upturns have to start somewhere.”
“On the supply side, the ‘spring lift’ has begun, but the flow of new listings coming on to the market each week is still well below average as would-be vendors choose to ‘wait and see’, given the uncertainty about how long a sale might take and/or the potential price achieved.”
“Housing affordability remains stretched and caps on debt-to-income ratios for mortgage lending loom next year. On balance, house price growth in the coming year or two could well be weaker than in past ‘rebounds.’”
Strategic approach for sellers
For those considering selling their property in this evolving market, there are several strategies that can be employed to optimise outcomes:
Pricing wisely: While demand is high, it's important for sellers to set a competitive but realistic asking price for their property. This will attract serious buyers and maximise the potential for a quick sale.
Showcasing the property's unique features: Highlighting the distinctive features of a property can make it stand out from the rest in a competitive market. Whether it's a stunning view, a well-designed layout, or modern amenities, these aspects can sway buyers in your favour.
Timely decision making: With competition on the rise, acting promptly on offers and negotiations can be crucial. Sellers should be prepared to make decisions in a timely manner to keep the momentum going.
Professional guidance: Engaging the services of an experienced real estate agent can make all the difference when it comes to navigating this shifting market. They have the expertise to guide sellers through the process and negotiate on their behalf.
Careful planning and expert guidance
While it’s too early to say that New Zealand’s property market is leaning towards sellers, there’s been a notable shift in recent months driven by greater demand and shrinking housing stock. For those looking to sell in the current market, a strategic approach is critical. With careful planning and expert guidance, sellers may be able to capitalise on this shifting market trend.
