Caution Over Confidence: Buyers Tread Lightly in Current Property Market

LJ Hooker Market Update Blog May 2024

Property market conditions have remained stable for some time, with interest rates at their current peaks and property prices not changing a lot. With a stable market, buyers have confidence that prices and conditions are not going to change, which means they are proceeding with caution to ensure they due their fair share of due diligence before committing to purchasing a new home.

The latest data from LJ Hooker Group for May highlights a positive trend in the property market, with an uptick in sales for the month. Simultaneously, there has been a decrease in new listings, indicating a shift in buyer behaviour towards seizing opportunities within the current property landscape. This change suggests that buyers are actively participating in the market, possibly motivated by a desire to take advantage of favourable conditions or secure their dream property amidst ongoing market fluctuations.

Recent data from LJ Hooker Group shows an uptick in sales, accompanied by a decline in new listings on a monthly basis. Sales have increased by 11 percent compared to the previous month (although down by five percent from last year), while new listings have decreased by 17 percent from April 2024 and eight percent from the previous year.

LJ Hooker Group Head of Network NZ Campbell Dunoon attributes this change in the market down to buyers adjusting to the current market conditions. Although the story is different across New Zealand, some regions are seeing fast sales and an increase in prices while our big cities are a little more stagnant.

“The coalition government has been in office for eight months, the budget has been delivered and now people are looking for some economic stabilisation and direction. However, despite positive monthly sales growth for LJ Hooker and Harveys offices, buyers are still grappling with the cost of high interest rates,” Dunoon said.

Caution over confidence

While there are still buyers in the market, the speed of transactions has remained flat as it is taking buyers longer to secure financing, which means they are being more considerate with their due diligence and property selections.

“Those who need to borrow money to secure their next home are being cautious about their next move. With property prices holding steady and interest rates at their current peaks, buyers are making sound decisions when considering their repayment obligations. While there is confidence in the housing market, there is caution from buyers who don’t want to borrow more than they can service,” Dunoon said.

These sentiments are more a reality in Auckland than they are in other parts of the country.

“In Dunedin, the market has held strong, as shown in CoreLogic’s House Price Index which saw prices increase 0.8 percent last month. Our LJ Hooker Dunedin office has seen the results of a positive market. In May it had a 100 percent auction success rate, showing that when conditions are right, buyers are ready and willing to buy, even as an unconditional buyer at auction.”

Looking forward

With the government budget delivered, changes to the bright lines test locked in and assurance from the Reserve Bank that interest rates are likely holding steady for the upcoming months, property sellers and buyers have adapted.

“There are many milestones behind us as the property market searched for a spark. While that spark is unlikely to turn into a flame any time soon, caution is how buyers are moving forward. Across the country, there are opportunities to be had and in the regions that urgency is slowly returning. However, economic pressures have made property buyers in the cities more careful as they take their time to prepare for the future without biting off more than they can chew,” Dunoon said.

Sell your property with us

Are you looking to sell? Get a free property appraisal with your local LJ Hooker agent (in-person or virtual) to find out how much your property is worth.

Your free appraisal will contain a detailed breakdown with an update on market conditions, how your property compares to similar properties based on local sales and listings, and much more.

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