At the moment every one I speak is asking the same question – ‘What is happening with the market?’. We have just had short, and quite sharp, period of uncertainty and to a point a correction of values.
Homes that were selling for $800K – $850K, are now selling for early – mid $700’s. Overall, I am now seeing values around the wider Western North Shore back the levels that they were at around May – June this year. Coincidentally this is also around the time when the new legislative rules were announced by the Reserve Bank of NZ.
Talking to Buyers over the last month or so there have been common conversation threads from buyers at all pricing levels: They are waiting to see what happens, concerned the market will drop further; They need to sell their house and are not confident that it will sell in time before; They are concerned that the market is crashing.
The ironic thing is that not long ago everyone was complaining that they couldn’t purchase because it was too competitive, there were too many Chinese buyers, and they couldn’t find anything because there wasn’t enough stock on the market. Now there is less competition and more stock, but buyers have the quicksand effect and are not taking action.
Coming back from the holidays next year I see the issue of timings with houses to sell being removed from concerns, stock levels will deplete over the Christmas period, and mortgage rate specials will be fairly aggressive as banks look to make up ground and the lower OCR. This will breed some activity and which then will increase confidence for those currently lacking the confidence.
I don’t see the market racing ahead like it did in January and February this year, but more like the previous year where we had activity and there was slow gains. If we get capital growth of 8-10% next year I think we should all be very happy.
My main question is whether this period of pricing correction that we are currently seeing has gone past the natural point, to then bounce back quickly to a middle point (likely to happen in Jan/ Feb if it does). Or, if this price level is actually the new ‘normal’ level. My feel is that it will bounce back slightly, but how much is the question, and I don’t know if that’s just what I am hoping it will do!! Only time will tell…
If you are thinking of making a move next year, I’d love to hear from you.