Market Update – August 2024

Standing Out in a Tough Market: East Realty's Innovative Strategies

Our team has recently achieved remarkable successes. Just last week, we put several properties under contract, demonstrating our relentless dedication and innovative approach. Notably, one deal involved a house swap plus a cash difference, highlighting our ability to facilitate creative solutions that meet our clients’ diverse needs.

Our latest listing in Bellevue saw a resounding success, with 27 groups attending the Sunday open home! This incredible turnout highlights the growing interest in the market, especially among first home buyers. The recent OCR drop and the ongoing mortgage war between banks is making home ownership more accessible, fueling increased demand. If you’re considering buying or selling, now is an opportune time to act!

In challenging times, adaptability and innovation are crucial. We do not confine ourselves to traditional methods; instead, we leverage our extensive experience and deep industry knowledge to navigate the complexities of the current market. With over 20 years of experience, we excel at identifying and structuring deals that others might overlook or lack the expertise to execute.

Our track record is built on exceptional problem-solving skills and a commitment to delivering results. We understand that every client and property is unique, tailoring our strategies to ensure the best possible outcomes. Our extensive network, market insights, and innovative thinking enable us to offer solutions beyond the conventional.

The house swap deal mentioned earlier exemplifies our ability to create win-win situations for all parties involved. By facilitating such creative transactions, we help our clients achieve their real estate goals, even in a less dynamic market.

At East Realty, we pride ourselves on providing unique and effective solutions that set us apart from the competition. Our clients trust us to handle their significant investments with care and expertise, and we strive to exceed their expectations at every turn. Whether navigating complex negotiations, identifying hidden opportunities, or crafting innovative deals, we are committed to delivering outstanding results and ensuring our clients’ success in the ever-evolving real estate landscape.

By leveraging these strategies, we aim to maximise exposure to buyers and ensure successful sales, even in challenging market conditions.

Trevor East – Director of East Realty

BOP Market Sentiment

The median price for Bay of Plenty for July is $800,000.

The current median Days to Sell of 52 days is more than the 10-year average for July which is 45 days. There were 31 weeks of inventory in July 2024 which is 10 weeks more than the same time last year.

Compared to July 2023:

Median Price – No Change
Sales Count is down -5.7%
Days to Sell is down -4

Compared to June 2024:

Median Price has increased 2.0%
Sales Count is up 26.0%
Days to Sell is down -5

“First home buyers and local buyers were the most active buyer groups in July, which local agents suspect is due to increased properties in the lower-priced brackets. Investors, developers, and owner-occupiers were less active.

Vendors were generally more accepting of market conditions, with those who bought at the market’s peak still holding on to higher expectations. Attendance at open homes varied; some saw steady attendance with quality buyers, while others saw a decline in numbers as buyers waited for the right property.

A good number of properties chose to sell by auction. However, most activity was seen outside of the auction room. Market sentiment improved with positive talk around interest rates, although some buyers wait for interest rates to drop further before committing.

Local agents are cautiously optimistic that there will be an influx of listings as we move into spring and that the market will track upward and steadily as we head into 2025.”

Jen Baird – REINZ CEO

Tauranga Rental Market Update - July 2024

July 2024 has seen a noticeable increase in the number of rental homes available in the market, which is a welcome relief for those in search of a rental property. This influx of properties has started to impact rental prices, particularly in the higher bracket of over $700 per week.

While there is still an overall shortage of homes, it is evident that tenants now have more options to choose from. This has led to a trend where high-priced rentals remain vacant for longer periods, primarily due to affordability concerns. Landlords are finding that reducing the rent by $20 to $50 per week can significantly increase interest and result in securing good tenants more quickly.

As spring approaches, we can anticipate further adjustments in the rental market. The strategy of lowering rents to attract tenants who can afford long-term leases proves to be a more viable option than leaving properties empty. This approach not only ensures a steady rental income but also contributes to market stability.

Median Rental Price in Tauranga in June: $695 per week

Bonds Active in Tauranga in June: 12,462

Bonds Lodged in Tauranga in June: 1,080

Bonds Closed in Tauranga in June: 1,047

Source: REINZ

NZ Property Market: Winter 2024 Trends and Insights

Optimism is returning, but it’s not yet evident in the property market. Despite mortgage interest rate cuts, decreasing inflation, and speculation about the Official Cash Rate dropping sooner than expected, the market remains slow with ample choices for buyers.

Realestate.co.nz data shows that the total number of houses for sale has increased, and sales are slower than average. Supply was unusually high for July, with nearly 7,500 more homes for sale than the previous year.

Sarah Wood, CEO of realestate.co.nz, notes that 17 of 19 regions saw double-digit growth in stock levels. Buyers have ample choice and time to decide, making it a competitive market for sellers who need to research local trends and be prepared to negotiate.

Average asking prices fluctuated regionally in July, breaking the stability of the past 18 months. Display price remains the most popular sale method, reflecting the market’s slower pace. New listings rose by 31.3% year-on-year, with Central North Island seeing a 92.8% increase.

Wood highlights economic factors, such as the recent bright-line test change, impacting the market. High stock levels and slow sales may present opportunities for buyers, though high interest rates and new debt-to-income ratios could pose challenges. For sellers, understanding market conditions and seeking local agent advice is crucial. The national average asking price in July decreased by 2.3% year-on-year to $848,548, remaining relatively flat over the past 18 months.

Source: REINZ & realestate.co.nz

OCR Reduced By 25 Basis Points To 5.25%

New Zealand’s Monetary Policy Committee has reduced the Official Cash Rate (OCR) to 5.25%, reflecting a positive shift in the economic landscape. Annual consumer price inflation is gradually returning to the target range of 1 to 3 percent, with various inflation measures aligning with the goal of low and stable inflation.

As global inflation declines and imported inflation returns to pre-pandemic levels, New Zealand’s inflation outlook remains stable, with expectations anchored around the 2 percent target. Economic growth is below trend, but the easing of monetary policy is a positive step, signalling confidence in maintaining low inflation and supporting a gradual economic recovery.

Positive Points for the NZ Property Market:

Lower Interest Rates: The reduction in the OCR may lead to lower mortgage rates, making borrowing more affordable for homebuyers and investors, potentially stimulating demand in the property market.

Stable Inflation: With inflation expected to remain near the target mid-point, the economic environment becomes more predictable, encouraging investment in property.

Improved Affordability: As inflation declines and monetary policy eases, the cost of living pressures may reduce, improving affordability and boosting confidence in the housing market.

These factors combined create a more favourable environment for property investment in New Zealand, offering opportunities for both buyers and sellers.

Source: Reserve Bank New Zealand | (Published 14 August 2024)