After nearly twenty-five years in this industry I have been through my fair share of booms, and subsequent busts. It’s with some disappointment that I have more recently observed that the good times are short lived while the bad times tend to linger.
Last month, after nearly three years of tough times, we received the good news we had all been hoping for, an OCR cut. The Reserve Bank finally accepted that the economy had detracted faster than anticipated, resulting in a small cut to the OCR and an indication there would be more to come.
Without wanting to sound like a know-it-all, I had predicted back in January that this would be the case. This had nothing to do with an ability to analyse economic data, but more of a feeling. In this job we deal with hundreds of people on a weekly basis. The anecdotal evidence was overwhelming, people were hurting. They had no confidence in the economy or job security, and for many their day to day costs had reached unmanageable levels.
As we keep hearing, it’s always darkest before the dawn so let’s focus on the positive and hope that this is the start of brighter days.
Receiverships
If you are in the receivership business things have never been better. Believe it, or not, receiverships are a sign that the economy has hit the bottom and the start of the recovery is underway. Receiverships get rid of the underperforming and lay a platform for re-growth.
I feel for anyone who has poured their blood, sweat and tears into a business only to finally admit it is no longer viable. The ones I have less sympathy for are those who were operating like a house of cards. Last month the Duval property group was placed into statutory management. The owners of the Duval group liked the planes, boats and luxury cars. Unlike Allan Hubbard, the former owner of South Canterbury Finance, who drove a VW beetle.
So while we are at the bottom and it all feels grim, just know the next chapter is the one with growth.
Interest Rates Drop
As Chloe Swarbrick likes to say, “ok boomer”. When it comes to interest rates the boomers like to regale us with stories of interest rate percentages in the 20’s. For our generation we were unimpressed when they hit the 11% mark and for the newer generation of homeowners, the rates have been unaffordable in the 7%.
The drop in interest rates is positive for more than one reason. The banks are back and prepared to compete for your business, favourable terms and cash contributions are all on the table once again. Servicing has just got easier too with more of your hard-earned money going towards principal repayments and not whittled away on interest. And while a .25% rate drop does not solve the world’s woes, we are ever hopeful future drops will free up more cash to spend on discretionary items which will have a positive impact on the economy. And so the cycle begins once more.
FOMO
Since the rates drop, we have seen a raise in activity on older listings which has been positive and completely unanticipated. We all know Wellington has gone through an incredibly tough period with several listings enduring extended campaign lengths. But it only takes a little bit of optimism for sentiments to change. After months of feeling like they had the upper hand, sitting on the sideline and waiting for a better deal, buyers have come out of the woodwork and secured eight of our lovely homes for fear they had missed the market. In one case we generated three cash offers within two days of the announcement, all at a level that the owner was happy to accept!
While we are nowhere close to the dizzying heights of the pandemic, and may not be for many years yet, the change is very welcome. We wonder if there may just be a few buyers feeling like they should have secured a property months ago.
The Public Sector Bleeding Is Over
In the capital, government department cuts have dominated the conversation as thousands of jobs were slashed to meet revised budgets. As a result, post March the market came to a screeching halt as potential buyers living in a climate of fear, decided to sit on their hands. In the back half of 2024, with many of those cuts complete and jobs secured once more, the buyers can breathe easy as they return to the market once more.
Watch The Immigration Numbers
If it wasn’t for people deciding to start a new life in NZ, we would be in the same situation as China which is no longer replacing their deaths with births. New Zealand will continue to be an attractive proposition for millions of people around the world which is great news for us as immigration will allow the country to grow even in the current climate. If the numbers of immigrants start to decline, and we see more New Zealanders leave our shores permanently, supply and demand will have a longer term negative impact on the property market.
The Wellington Market
As you might have gleaned from this Barometer things are picking up in the capital and long may it last. I predict every time we receive a rate cut it will give the market a sugar hit which is good news for anyone looking to bring their home to the market this spring and summer. But potential vendors be aware, our forward stock is unseasonably busy which could mean if you wait until November your home is in competition with many others. If you’re in the position to take advantage of low levels of stock now is the time. Maximise the buyers’ interest and you have the best chance to generate competition and an above market price.
Coming up this year are the new RV’s. This is likely to send a shock wave through the city and the talk back switch board will light up like a Christmas tree. Just remember an RV isn’t real money, just a way for the council to apportion your rates.
Wellington Market Quick Stats
What’s on in Welly?
Musika Moana Choir Competition, Michael Fowler Centre – 7 Sep 2024
Choirs from across the country will converge on Wellington for a new singing extravaganza. The Musika Moana Choir Competition offers a unique chance for Pacific community choirs to showcase their talent. Choirs will be assessed across several categories. These include vocal performance, musicality, and creativity. Taking place in three cities over a month, the Wellington leg is set to fill the Michael Fowler Centre. The celebration of music, culture, and togetherness promises to be a joyous occasion.
Click here to book your tickets
An Audience with David Walliams, St James Theatre – 30 Sep 2024
Brace yourself for an outrageously cheeky evening with one of Britain’s best-loved comedians. David Walliams has been delighting audiences on screen, stage, and in books for 20 years. Now he brings a live show to Wellington. ‘An Audience with David Walliams’ consists of wickedly funny tales, beloved characters, and a glimpse behind the curtains of a comedian’s career. His comedic brilliance has captivated audiences for the past two decades. From his iconic characters in ‘Little Britain’ and ‘Come Fly with Me’ to his hilarious best-selling books, he has gathered a huge following, He has become one of the most influential children’s writers today with titles like ‘Gansta Granny’, and ‘The Boy in the Dress’. His books have been translated into fifty-five languages and have sold more than fifty-six million copies worldwide.
Click here to book your tickets
Silver Ferns – Cadbury Netball 2024 Season, Te Rauparaha and TSB Arenas – 2-20 Oct 2024
Don’t pass up the chance to see the fast footwork of the Silver Ferns on the netball court in 2024. New Zealand’s national team will meet their great rivals the Australian Diamonds and the England Roses during Netball New Zealand’s (NNZ) centenary celebrations. The Taini Jamison Trophy is being fought against the English Roses across three test matches. Porirua’s Te Rauparaha Arena hosts the second bout on 2 October. The Silver Ferns will meet the Australian Diamonds in the four-match Constellation Cup. Wellington’s TSB Arena will be the arena for the first contest on 20 October.
Meet the Ben Stevens & the Team
If you, or anyone you know, could benefit from a considered market assessment by Wellington’s only licensed agent and registered property valuer, please do not hesitate to call. We are always happy to help.
