Will it be a Budget boom or Budget bomb for the real estate market?

With the budget announced the property market is seeing an improved sentiment for the coming year and although the residential and non residential markets are not showing strong growth yet, the demand for stock in some sectors has started to see a return to a competitive environment for buyers resulting in some upward price pressure on property. We’re seeing a high demand from tenants for rental properties in the South Island off the back of floods and earthquakes resulting in increasing rental prices; a trend not isolated to the South Island with Auckland leading the way on rental price growth.

Harcourts NZ CEO Hayden Duncan says the budget could have a positive effect on the market.

"The Budget announcements have provided a strong incentive for New Zealanders to build savings and investments further which will be good for a slowly improving real estate sector."

The month of April provided a lower volume of written sales throughout the country than in March, in keeping with historic seasonal activity. This reflects the market starting to show some resilience with Harcourts written sales volume being the third highest level recorded in one month by Harcourts, over the last year. When the Christchurch impact is taken into account the result nationally is very strong.

The Northern region continued to see strong buyer activity; this was reflected in a 14.8% increase in written sales. Average days required to sell dropped to 34 (REINZ) showing returning confidence in property for the region. Auction is popular as the shortage of homes for sale continues, increasing competition.

Continually surprising results from Christchurch show Harcourts written sales down only 22.8% compared to last year. Auctions, as a percentage of new listings, increased with strong competition in the auction rooms. The supply and demand impact on Christchurch is seeing upward price pressures reflecting a rise in the average sale price.

Overall we are anticipating a flat to positive outlook for the real estate market over the next twelve months with Commercial property and residential investments proving to be good performers along with the first home market.

Source: Harcourts Property Focus

Posted: 8 Jun 2011

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