More “realistic” house sellers are finding buyers – and there is a warning that anyone expecting lower interest rates to mean higher prices right away could be disappointed.
CoreLogic data shows the gap between asking prices and selling prices has tightened a bit.
In the middle of last year sales prices were typically 5% below asking, but that had reduced to 4% in the latest data.
The gap never got as wide this cycle as post-Global Financial Crisis (GFC), when sales prices were more than 10% below the asking price.
CoreLogic chief property economist Kelvin Davidson said it was plausible that sellers were becoming more realistic in their asking prices.
“Not a sign of a strengthening market necessarily, but perhaps a sign that pricing is getting more realistic, and might set the scene for increased turnover.”
Opes Partners economist Ed McKnight said it could be that buyers were using the opportunity of a cooler market to negotiate harder.
There were 5816 homes sold nationally in September, down 1.1% compared to September 2023. Seasonally adjusted, that was up 1.8% from August.
Brooke Gibson – a real estate salesperson for Eves in Whangarei – said sellers were looking at what was on the market, and the price that homes were going for.
“If they are buying and selling in the same market it’s apples for apples. You can’t expect to get top dollar for one place and a cheaper price on somewhere else. I think a lot of people think ‘this property doesn’t serve a purpose for us anymore we’re going to sell it and we’re going to move on’.”
Real Estate Institute chief executive Jen Baird agreed that vendors were adjusting their expectations.
“You have to be living under a rock to think that the property market is fizzy at the moment. People who are selling properties generally get that.”
She said there were large numbers of houses to choose from – up 27.4% year-on-year to 30,028 for sale in September, which meant buyers had options.
The increasing number of days homes were on the market indicated buyers were taking their time, she said. The median days to sell increased by nine in September to 49.
“They can wait for the right property and negotiate hard, we’ve seen this right through this year. Buyers have done exactly that… if vendors want to sell they have to meet the market. We see that all day – there are still 5500 to 6000 selling every month so there are plenty of transactions happening.”
She said that while the arrival of spring and reductions in interest rates would help, it was still a challenging environment, with sales volumes below long-term averages.
Sellers needed to capture attention and create competition where possible.
“If you’re coming to market now you need to think about ‘what’s the best way to create competition for my property, how do I be seen in a crowded market’.”
That might mean an auction or deadline sale, she said.
“Properties that start off as an auction listing, even if they don’t sell under the hammer, tend to sell quicker because you’ve created that competition.
“If there is unconditional money around or people are interested, how do you bring them to the table at the same time so there is competition and present the property as best as possible so people see it.”
But she said that there were some vendors who had decided that because the official cash rate had been cut, it meant prices were immediately turning up.
Anecdotally, there had been more rejected offers in recent weeks, she said.
“Some vendors are seeing the OCR reduction as a signal that prices are on their way up and therefore my property is worth more. That’s a bit flawed, a bit one-dimensional.”
A property would get the most attention when it was new to the market, she said. Getting the marketing and presentation right, and using an appropriate pricing strategy from the outset, would provide the best opportunity for a sale.
TradeMe Property customer director Gavin Lloyd said the market was starting to show signs of renewed momentum and the price expectation gap between buyers and sellers could narrow further.
“Sellers are still having to work hard to stand out amongst the competition – so if you’re selling be realistic, take advice from your agent and be prepared to adjust your price expectations if necessary.”
