New Real Estate Trends Having Impact on Southland Too
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The average asking price of property in Southland has hit the $500,000 mark, but it hasn’t put off first home owners from purchasing.
Southland is one of just four regions where the average asking price for residential properties increased from October to November, data from realestate.co.nz shows.
The average asking price increased 2.5% in the month from October to November, while the only other asking price increases were in Bay of Plenty, Nelson and Bays, and Coromandel.
In the year between November 2021 and November 2022, Southland saw a 7.9% spike in the average asking prices, which rose from $492,000 to $531,000, the data shows.
Mike Pero Southland owner Sheree Williams said the region was still a very affordable place to live, and the prices were more realistic now.
Property was spending more time on the market and investors were getting knocked out by first home owners, because of high interest rates, “and the yields don’t stack up,” she said.
“We don’t have the same demand for buyers but we still have buyers.”
Statistics show new listings nationwide have dropped, including Southland, with 216 new listings coming onto the market in Southland in November 2022, compared to 249 in November 2021 – a 13.3% drop year-on-year.
Sheree said a lot of property at the higher end of the market was also being sold, as people started to downsize their properties.
Realestate.co.nz spokeswoman Vanessa Williams said the average asking price nationwide peaked at nearly $993,000 in January 2022 before falling below $900,000 in November, and it’s expected to be around $890,000 by the end of December.
Inflation, interest rate increases and fears of a looming recession were all factors impacting the property market and the dip in new listings came as the official cash rate [OCR] rose for the ninth consecutive month.
Mortgage & Insurance Supply Southland owner Mandy Jordan said it’s well-known interest rates are on the rise at the moment, “but we were kidding ourselves to think rates on 2-3% were here to stay. Perhaps interest rates are just correcting to where they should have been the whole time”?
She said many clients are splitting their mortgage over multiple fixed periods to spread their risk, or looking at offset/flexi facilities to have savings talk to their lending, to reduce costs.
“Plenty of first home buyers are still making contact to get pre-approved and purchase their own home. When a property is rented the landlord often has a mortgage on it, as their costs to own the property go up – this is most likely passed on to the tenant.
“With owning the home, the client can fix their interest rate and control their repayments, as well as have the school zone they like, the ability for the kids to run around with crayons and not worry about the landlord, but most of all not have the fear that they could be removed from their rental at any time.”
Mandy said every 10 years it’s believed property values at least double – as long as people are in it for the long haul they balance this out with any chance of the property value decreasing in the short term.
“Banks are still looking at realistic spending. The old school rent plus savings = loan payment is back. Afterpay/Oxipay/Laybuy etc isn’t looked at nicely and cash advances on credit cards are questioned.”
If becoming a home owner in 2023 is a goal, contact Mortgage & Insurance Supply Southland sooner rather than later. They can assess your situation as at today and let you know what to work on – best of all they assess all the lenders to save you time and don’t charge for appointments.
For more information contact:
Mandy from Mortgage & Insurance Supply
Sheree from Invest In Southland with Sheree Williams