North Wellington Market Update – August 2010
The market is going through a softening period currently but we are hoping that as the weather warms up again and the economy continues to slowly recover, we will again see a firming of prices in the area. The market currently is characterized by inactivity both at the seller end and at the buyer end.
In saying that, there are some very motivated buyers looking currently who are struggling to find a home that they like and fits their budget. There are a good number of homes languishing on the market at the moment and are not selling because of lack of sun, deferred maintenance, or because they are simply priced too far above fair market values.
Buyers have time on their side with the market moving slowly and are, therefore, taking the time to view everything that is actively being marketed to get a good feel for fair value. Buyers are being choosy and hesitant to offer unless they find something that represents good value for them. The average gap between listing and selling prices last month was relatively small at only four to five per cent which indicates successful vendors are being realistic in assessing the market value of their home.
What we have is a genuine rather than a speculative market, with people seeking and buying homes to meet their own needs. There are few if any property investors buying at the moment but a good number are currently active sellers taking. There is talk of a high level of vacant rental properties in Wellington which appears to be going against the trend Nationwide of less rental accommodation available. This could be due in part to a number of big central city apartment developments coming onstream and entering the rental market.
Greater Wellington district sales numbers slow
The Wellington district median residential property price rose to $405,000 last month from $385,000 in May, and is 8 per cent up on the June 2009 median of $375,000. The number of sales throughout the district was 485 compared with 548 in May and 674 in June 2009.
Mortgage rates to stabilize
Good news from Dr Bollard recently! In raising the Official Cash Rate -the device that sets virtually all lending interest rates- by 0.25%, he commented that in view of the sluggish internal economy, he felt it unlikely that interest rates would rise much more in the next 18 months.
Many will now adjust to Variable or Floating rate mortgages given that Fixed Rate loans are going to feature higher interest rates.
What that means is we can budget with some certainty, while taking advantage of Variable rates under 6.5%. These Variable Rates should remain well below what most Fixed Rates have been marketed at during the past couple of years.
Other than during the extremes of last year, we haven’t seen mortgage rates this low since the 1960’s!
To keep yourself up to date with current mortgage rates across nearly all lenders (major banks, minor banks and non-bank lenders), see all rates on offer (floating, along with fixed rates from 6 months to five years), and to check and compare what you can get, go to www.mortgagerates.co.nz.
