Well here we are… attempting to write about such a hot, scrutinised topic in New Zealand currently – the New Zealand Housing Market, Real Estate and House Prices. Coming at you from a Real Estate Agents point of view, attempting to provide you as much clarity and information/opinion from someone slogging it out in the trenches, but first let me introduce myself…
My name is Nick Drysdale, Tauranga Real Estate Agent with Tall Poppy Tauranga Central. First of all can I just say how lucky I am to be living in this beautiful city, near the water in peace and tranquillity with my wife Anna, dog Macy and two cats Hugo and Chief.
Real Estate is such an intriguing, compelling and turbulent industry and it absolutely astounds me to think back to the end of 2020 and the beginning of 2021. In case you have forgotten let me take you back to what felt like armageddon in the market and our experience as home buyers during that period. Selling our home in Hamilton in January 2021 put us in good stead to be able to combat the absolutely absurd prices and traffic that houses in Tauranga were garnering. Where do you start when a property you thought for sure would start with a six ends up selling for $825,000, and every agents best friend was an auction that would drive the FOMO and price to mars and back.
Well… how did it pan out for us you ask? Anna had found her ‘dream home’ I use this term loosely as we fell in and out of love with multiple ‘dream homes’ during this process as did 99% of buyers. We ended up with a private viewing on the Monday after the first open home on the Sunday, which Anna and I could not make, however her parents kindly went along and eagerly gave us the tick of approval. After the private viewing (in which it was bucketing down in the middle of February might I add) we both knew that we would need to front up with a strong offer. Price guideline was said to be late 6’s into the 7’s but in all honesty the open home and private viewing were so chaotic that we knew we would likely need to be stronger than that to have a hope.
We went ahead and made an offer with a price pulled out of space in the mid 7’s where we were happily told we were in the top two out of EIGHTEEN OFFERS presented!! At that point we were ecstatic to have the opportunity to own this home so we upped our offer slightly. We were very fortunate to have clean conditions (only two days finance) which ended up as the clincher. We settled two and a half months later and have now been happily living in what we consider our little slice of paradise since.
Since successfully purchasing our home we have watched as first home buyers and the likes have been priced out of the market and then had their lending restricted due to the introduction of the CCCFA (Consumer Contracts and Consumer Finance Act) which aimed to kerb the unsustainable rising house prices. In a lot of ways it did work, however some would argue the first home buyer were the ones who were most affected.
Fast forward to present day and the so called ‘doom and gloom’ continues with the reserve bank and the government both having forecast a recession by Q2 next year. I urge to remind people however that whilst the word ‘recession’ rings alarm bells for most kiwis a recession can be declared by a consecutive two quarter decline in the countries GDP (Gross Domestic Produce) which doesn’t necessarily spell economic turmoil and is basically inevitable for a country to curb rising rates of inflation.
The reserve bank has also stated that they predict a 18.9% reduction in house prices from what was our absolute peak last year and it may surprise you to learn that around 12% of that reduction has already happened. Yes some properties may devalue significantly more but that only means some will devalue less. The trough is predicted for March 2024 and whilst no one can tell you for certain what is going to happen Im not taking a pessimistic view.
If you have read all the way to here I really appreciate it, and I am hoping to post weekly if not fortnightly with updates on the market, new properties, interesting topics and just life in general, until next time – take care.
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