House price median falls
In what has been described as a “surprising” turn, Gisborne’s median house price fell by 0.9 percent last month (June).
Real estate agents here, however, say it is the normal winter trend, rather than the first indication of the housing market here cooling.
It has been a record-breaking 12 months to the end of June in the district, with median prices topping the nation with a 35 percent increase on the previous year.
The June data was released by CoreLogic — a company that gathers real estate data in New Zealand and Australia.
Head of Research Nick Goodall said Gisborne’s change of direction was “surprising” after it had gained 35 percent over the past year.
Tracy Real Estate owner Tracy Bristowe said winter was always quiet.
“I think we are coming off an extremely busy period so there is a perception that there has been a huge decline, but this is normal,” she said.
However, the buyer fear of missing out had waned a bit and was not so prevalent, she said.
“To be fair, our median prices were so ridiculous that this is a slight correction I’d say.
“The median price isn’t just for everyday people in the city. It captures a bigger house range and sales that go further out than the general city.”
Bronwyn Kay Agency Limited principal Bronwyn Kay agreed it was the winter slowdown.
Ms Kay said she had also just received data from One Roof that showed Gisborne sales had gone up 1.4 percent in June.
“You can make statistics work whatever way you like. The market probably is cooling a little but that’s just normal winter data.
“Traditionally, winter does slow down and the more expensive homes don’t come on the market.
“We have seen the fear of missing out go from the market. People are sitting back and making sure when they do purchase it is a wise purchase.”
Ms Kay said her team had just gone through their data and last month they had $9 million in property sales.
They had sold more $1 million homes than ever before, she said.
Mr Goodall said the rate of growth in June slowed in 12 of New Zealand’s 18 largest markets, with a further three recording a drop in values over the month.
“The exceptional growth displayed during the past year was not sustainable, particularly with increased deposit requirements, market uncertainty driven by Government regulation and the prospect of higher interest rates.
“The turnaround should perhaps not be too much of a surprise, though the timing of it certainly is,” Mr Goodall said,
“Impending increases to interest rates is the other major factor weighing on the minds of owners and would-be buyers’.”
Mr Goodall said it was also worth noting that average NZ household mortgages were at record levels.
“Even a small increase in mortgage rates could have a significant impact.
“While our bank valuation activity confirms demand for residential property has and will continue to reduce, persistent low levels of new listings is likely to limit any significant drops in value.
If the recent signs of weakness persist throughout the rest of the year however, alongside what would be a seasonal uplift in spring listings, we may finally start to see the imbalance of demand consistently outstripping supply addressed.”