Talking to the experts – what’s really happening in the property market?

Let’s face it, we Kiwis are obsessed with property. It’s a national pastime, right up there with rugby and complaining about the weather. Whether you’re at a family BBQ or grabbing a coffee with mates, chances are, before long, the conversation will turn to house prices.

But with all the noise out there, especially on social media, I know it can be hard to separate fact from fiction. That’s why I thought it was time to sit down with the experts and get the lowdown on what’s happening in the market right now.

Over lunch with three seasoned real estate agents, (link to bios below), we fired the questions, and they came up with the answers. Needless to say, they had plenty to say (they’re real estate agents, after all), so it was a wide-ranging conversation, from the ever-present interest rate discussion (see previous article!) and market conditions to buyer behaviour, real estate agent strategies, and property presentation.

 

The real estate low-down

As we all know, the market has noticeably cooled compared to the frenzy of recent years. Prices have stabilised after decreasing in 2022-2023, creating a more balanced environment.

Everybody agreed that the absence of FOMO (fear of missing out) among buyers has led to a much less pressured atmosphere than two years ago.

“They feel like they can take their time to get the right property.” Michael

This stability presents opportunities for buyers previously priced out or overwhelmed by the competition.

“It’s cheaper to buy now, so you’re getting more house for less money than a year ago.” Andrew

While there are fewer buyers overall, those in the market tend to be more serious and prepared.

“The quality of the buyers at open homes – they’re not just there to kick tyres. They’re quite serious.” Andrew

 

First time buyers

First-time buyers are facing significant challenges, grappling with affordability issues and concerns about job security in an uncertain economic climate. But buyers looking at homes over $3m aren’t affected by finance or job security.

“They don’t care whether the market’s up or down; they’re still going to buy. They’ve got the money, and they don’t care.” William

 

Investors

Investors have become less active despite regulatory changes and higher interest rates. Potential buyers are adopting a ‘wait and see’ approach, hoping for more favourable conditions.

The market is also showing distinct patterns based on property types and locations. Good family homes in desirable areas, particularly sought-after school zones, continue to perform well. However, higher-end properties, especially those over $2.5m, face more challenges in attracting buyers. New builds and apartments are struggling in some areas, possibly due to oversupply or changing buyer preferences.

“I can’t get enough properties in Belmont and Takapuna. I know when I get them, I’m going to sell them. My average number of days on the market has been 21 for this area in the last 6 months, while the industry average across the North Shore is 43.” Michael

Interest rates are crucial in shaping the market. Higher rates have impacted affordability and buyer confidence. Some potential purchasers are delaying decisions, anticipating possible rate decreases.

“We always go back to when the prices were high, and it’s like, hang on a minute. It was low interest rates then. Everyone thinks the interest rates will come down to 2% or 3% again, but they’re not.” Andrew

The importance of property presentation has heightened now we’re in a more discerning market. Sellers need to address issues upfront to attract buyers and there’s an increased emphasis on thorough disclosure to prevent future legal issues. Proactive measures like obtaining building inspections and addressing potential problems before listing, can make a significant difference in achieving a successful sale.

“It’s not just about throwing a bit of Wet & Forget on the roof and water blasting the fence. It’s important that we handle the paperwork properly. That building work is consented, and subdivisions are legal.” William

Real estate agents are adapting their approaches to the changing market. More handholding and guidance are needed for both buyers and sellers who may be less familiar with current conditions, such as first-time buyers. Setting realistic price expectations and educating clients about market realities have become crucial. Agents need to develop tailored strategies based on the specific property and area, moving away from one-size-fits-all approaches.

“I sent a blank sales and purchase agreement to a first home buyer. I said, before we meet and see any properties, I want to talk you through this so that you are comfortable putting an offer in. So, I had to guide her through so she could make an informed decision and offer based on the information.” William

Downsizing?

While there’s some discussion about downsizing, it’s not emerging as a major trend yet. Adult children living at home longer is affecting the market, potentially delaying both upsizing and downsizing moves.

“I think people are holding on probably longer before they downsize. Also, the kids are coming back to live with you because they can’t afford their own property.” Michael

“People don’t retire at 65 anymore. That’s not happening. Older people are now working longer.” William

There’s growing interest in alternative arrangements like shared ownership, though these remain relatively niche.

The current market demands thorough preparation and information from both buyers and sellers. The importance of getting pre-approved for financing and thoroughly understanding options has increased, with buyers needing to be more prepared than ever before.

Working with experienced professionals who understand local market dynamics is more valuable than ever. Flexibility and realistic expectations are key – buyers must be prepared to act when opportunities arise, while sellers should be open to market realities when setting prices and terms.

“If you sell now, at least you’re not going to get priced out of the market. If you’ve got to make a move now, it’s probably the best time to do it”. Andrew

 

Future Outlook

Broader economic concerns are significantly impacting the housing market and job security worries are affecting buyer confidence, making many more cautious about significant financial commitments.

Overall economic uncertainty is casting a shadow over the market. However, some sectors and individuals are performing well despite the general slowdown, creating pockets of opportunity.

“The opportunity for me is that real estate is about your next step in life.” Michael

There’s a sense of cautious optimism about market stabilisation. Everybody believes homeownership will remain an important aspiration in New Zealand, supporting long-term demand. However, there’s uncertainty about long-term trends and the potential impact of policy changes, making predictions challenging.

To summarise, with prices stabilising and a less frenzied atmosphere, there are opportunities for both buyers and sellers. Whether you’re a first-time buyer, investor, looking to change homes or need a new mortgage or to refinance, contact me here.

 

Real estate agent bios

William Tatana – Team William Tatana – Harcourts Cooper & Co

Andrew Harley – Harcourts Browns Bay

Michael Swarbrick – Harcourts Takapuna