Prices continue to increase
Prices continue to increase
There is a huge variance between average house price values in Rotorua from month to month due to the small number of sales each month, however, it is clear that prices continue to increase across all price brackets.In June this year we recorded the highest ever median sale price at $440,000. Since then it has fluctuated between $375k and $420k. This certainly doesn’t mean prices are dropping, but the $440k median in June was an anomaly, rather than the start of a new trend. There are huge fluctuations in the prices from a statistical perspective, making it very difficult to accurately assess market growth, but looking at a larger sample of sales data, the last 12 months would show an average increase of 15-18%. I recently sold a property that we had on the market 12 months prior also. Due to a change in circumstances, the seller decided to keep the property then, but was ready to sell this time around. The value increases of properties in Rotorua can be clearly seen when the same property is marketed within such a short period of time. A year ago, we attracted offers around $380k, this time around they were around $440k, which equates to a 16% difference in value. Nothing changed other than the market.
Will this continue in the near future?My prediction is that we will see property prices increase in the next few years, but at a slower rate of around 5%-10% pa.
Delayed Spring ActionThis year we experienced a delayed spring surge of new properties coming to the market. Typically we see a big increase in properties for sale in August & September, where this year the biggest jump in new properties to the market happened in October/November. The lowest number of properties on the market ever recorded was in July this year with only 160 properties available. This jumped up to 325 in November, which is comparable to the previous two years. This number should slowly creep up in coming months, creating a bit more balance between the supply and demand.
To sell or not to sell?My recommendation for homeowners remains the same. There’s no hurry to sell now if you are going to purchase again, however, make sure that you have a solid plan in place for your next purchase as it might take some time before you find something suitable. Selling your house won’t be the problem. The question is more about how you ensure you get the best result in your timeframe.
I’d happily help you put a plan in place to suit your personal circumstances. If you own investment properties it depends on your long term plan. Keeping property long term continues to be a great choice of investment in my opinion. There are changes on the horizon with insulation requirements and new wood burner bylaws that will restrict the use of old wood burners (installed prior to September 2005). There are also changes in the pipeline regarding tenants’ rights and the time-frame to give notice to tenants to vacate.
Due to the changes as indicated above and whatever new changes might be introduced (such as building wof for rental properties and the like) it may be a good time to upgrade your investment portfolio to higher quality properties. By capitalising on today’s market, your rental properties are more likely to attract first home buyers than a few years down the road, which typically means a higher price. If you’re looking to put your money elsewhere in the near future (ie within the next 12 months), now might be a smart time to sell.
You should make the decision based on your time frames and what suits you best, but the changes looming with new regulations might mean any increase in value could be diminished by the additional work required during that period. A lot will depend on your investment strategy and what you’d do once you sell. For some, it may make more sense to wait, whereas for others it might be smarter to make a move sooner and have the certainty of a sale in a seller’s market.