We cover the effects of interest rate rises, home owners versus investor buyers and house prices.
Current market conditions
119 Tauranga homes sold in February, in a solid month of activity.
We saw lots of million dollar plus sales; eight in Tauranga and thirteen at the Mount. That’s three to four times more than normal.
It looks like investor buyers are back in the market
at the $275,000 to $325,000 mark. However first home owner buyers are still not really around.
After four years of very low interest rates they’re finally starting to rise. I expect rising interest rates to
create an urgency for buyers as they try and get things settled. House prices haven’t gone up as supply and demand would suggest, even though there’s been plenty of buyers and a shortage of listings. Because of this I’m not expecting the extra activity to raise house prices.
I’m also not expecting the interest rate rises to have a big effect on the market in the long term. From my years of observation, interest rates alone are not enough to make changes. It’s the whole environment that causes changes.
Buyers and sellers
We’ve still got a shortage of homes for sale but we are seeing more sellers coming to the market which is improving the situation.
Properties that are presented and priced well tend to sell within in weeks.
The shortage means buyers still need to be serious about moving when they see a property that suits them.
For the first time there are more people renting than owning in New Zealand, according to Statistics NZ.
Part of this is probably caused by the restrictions placed on first home owners causing them to rent for longer.
Investors buy in a different way than a home owner. They’re more concerned with looking at the numbers than the emotional appeal.