Quotable Value has just released their latest monthly sales data.
And I quote….
“Property values in the Wellington region decreased by 6.0% over the past year (calculated over the three months ending November 2008 in comparison to the same period last year), a very slight improvement on the 6.1% decline reported in October. The average sale price for the region decreased slightly to $411,922.
Mr. Max Meyers of QV Valuations said; “Early signs that the Wellington market may be beginning to steady are slowly emerging, possibly as a result of changing interest rates. Generally, buyers are starting to show more curiosity. The indications are; steadier prices in the last two months, and shorter selling times over the past four months”.
“The highest average sale price is in the Western Suburbs at $540,000, a level last seen in June 2007. The area with the lowest average sales price was Upper Hutt at $317,000, back to the February 2007 level. Overall, the average sale price in the region has declined $13,507 compared to the same period last for the year” said Mr. Meyers.
“A further reduction in interest rates will help the market to steady itself, and will provide good buying opportunities over the next few months.”
I can’t help but echo Mr Myers sentiment!
Currently their seems to be about a $50k difference between buyers and sellers in my market place but the info above from QV suggests that there has only been an average $13k softening in prices over the market peak a year ago, hence, an impasse between buyers and sellers leading to low turnover.
Motivated buyers are hard to find, but opportunistic investor types are plentiful. Running on the back of overly hyped and very negative media reports that house prices have tumbled through the floor and that all owners are crying out for an offer at any level, our office has been infiltrated by some naive and bolshy amateur “investors” in the last few months. The “make a million in real estate in a year at everyone else’s expense” crowd are actively out and looking but very few are actually purchasing. The reason?
Simply, prices have softened but not by that much, and the reported plentiful pile of vendors panicking with the bank at the door is simply rare to nonexistent. And with interest rates, petrol, and food prices falling, the financial pressure is easing not growing for any vendors that are stressed.
It is interesting to see the average time on the market falling and prices steadying.
Certainly, in the last month there has been good enquiry and open home attendance at levels I haven’t seen since last year some time, and with the mortgage rate chalk boards been altered outside bank branches at the mo, buying must be starting to look very attractive to many young purchasers who have put the effort in to save a reasonable deposit or have mum and dad guaranteeing the loan.
There are some great opportunities in my market at the moment especially in the three plus study/rumpus sized home around the $390k – $440k mark.
Interestingly ,there is some fustration beginning to be expressed by young buyers who have been looking for a month regarding the lack of fresh stock. This tells me that these buyers have seen all the stock on the market in an area and this takes dedication and a willingness to give up weekends and time after work to view homes. This sentiment and a focus on their market of choice is very positive as it demonstrates high motivation to buy. This fustration now simply needs the added ingrediants of a touch of urgency and a pinch of stability in the financial markets, and the buying will begin. Any agent in the area will tell you that there are plenty of people looking, converting the lookers into buyers as another thing!
Do I think their are good buying opportunities?
Yes! Especially in areas where amenities are being upgraded.
The recently started upgrade to the Johnsonville train line, the massive planned upgrade to Johnsonville Mall, the upgrade of Newlands Mall starting with the new community centre just opened, a shopping strip and new school planned for Churton park, the release of new sections at the North end of Churton Park and the opening up of the land to the north of Grenada Village with the road now connecting directly to the motorway, makes the Wellington suburbs of Johnsonville, Newlands, Paparangi, Churton Park, and Grenada Village all worth keeping an eye on. When amenities rise, buyers see greater value in the surrounding areas and property values follow.