During February children went back to school and people returned from their holidays and (as it often does) housing activity in Napier picked up after two sluggish months. However, according to the latest data from the Real Estate Institute of New Zealand (REINZ), the overall direction in the number of sales appears to be trending downward.
This is explained by three primary influences:
the raft of legislative changes impacting the housing market at present
increasing difficulty in obtaining finance (despite a record low OCR and low borrowing rates) and
buyers resisting seller pricing expectations
House prices continue to remain firm in Napier with Quotable Value reporting prices are 12.5% higher now than a year ago. While prices continue to rise, the rate of increase appears to be slowing.
In February, the median number of days to sell a property increased to 40 days reflecting the gradual increase over recent months as some potential buyers wait for sellers’ expectations to re-align with the gradual changing in market conditions.
This shift may not occur quickly because inventory levels (i.e. the number of homes for sale) remain low and, compared to other parts of New Zealand, Napier (with a median price of $510,000) continues to be more affordable than many other regions.
Predictions are that the housing market may soon ease, as banks continue to be prudent in their lending; investors’ concern increases; and the expectations of buyers and sellers adjust to be more in sync, especially as affordability constraints are felt.
The pipeline of proposed Government policy changes (and associated uncertainty this brings) could add to a more challenging market outlook and increases in bank capital requirements could see credit conditions tighten, if implemented.
For an up-to-date report on the local real estate market, call us at Cox Partners Estate Agents anytime on (06) 835-4321.