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"Home buyers' hell emerging in Wellington with hot competition for fewer houses"

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  • "Home buyers' hell emerging in Wellington with hot competition for fewer houses"

    Fairfax article just posted on stuff, story for tomorrow's Dom post, Wellington house prices finally starting to explode higher.

    A buoyant Wellington property market is turning into a home buyer's hell, as hot competition for dramatically fewer houses force up prices.
    And frustrated Auckland investors, turning to the capital to purchase rentals, are making it even tougher for local buyers.

    Typically, Wellington has about 1000 to 1300 houses on the market at this time of year, but currently, there are only about 700 properties for sale in the city.

    As a result, many houses are being quickly snapped up for top prices by eager home buyers, with confidence boosted by low interest rates and easier access to KiwiSaver, according to the real estate industry.

    Tommy's Real Estate's top agent, Nicki Cruickshank, said about one in five of her buyers were Auckland investors shut out of their own region.

    In Haitaitai, a property on Hapua St had 15 offers after only a week on the market, and sold for $101,000 more than its listed price.

    Another property in Berhampore sold swiftly for more than $160,000 above its listed price, and $300,000 over its rateable value.

    "The vendors were very happy," Cruickshank said.

    Wellington's auction houses were bulging at the seams as a result of demand outstripping supply, Harcourts auction manager Steve Fejos said.
    Six months ago, only three to five people would register for an auction, but that had grown to as many as 20 registering "Now our auction rooms are full. We had half the number of buyers six months ago."
    He agreed Auckland buyers were turning to the capital to invest in residential property.
    "It only needs two or three dozen [Auckland buyers] to influence the market here."

    Fringe city suburbs were proving the most popular, with Newtown a stand-out for its strong growth and neighbouring Berhampore also on the up, Fejos said.
    Industry statistics showed Wellington houses stayed on the market for an average of about four weeks, half the average sale time in 2009/2010.
    "Really, it's the last few months that it's come together for Wellington."
    The most popular properties were older weatherboard homes that were built pre-1980, Fejos said.

    Wellington registered property valuer Kerry Buckeridge, of QV, said Wellington's residential property market had started moving in the past six months in the wake of booms in Auckland and Christchurch.
    "Not very long ago, the typical buyer was looking at how little they could pay for a property. Now, it's how much they can stretch to get it. It's quite a change."

    Wellington mortgage broker Simon Rule agreed, saying he had several people searching for more than a year to buy a home, and one client who took about two years before he finally managed to buy .
    "Never has there been a better time to borrow, but if people can't find a property, it can be disheartening."

    Real Estate Institute of New Zealand's Wellington regional director, Euon Murrell, said It was unclear why about half the number of properties were on the market in Wellington compared to recent years.
    That lack of listings meant some buyers were snapping up any homes they could get their hands on.
    "We had one the other day in Tawa that only went on the market for four days and we had eight offers."
    The numbers of people turning up for open homes had also surged in recent months, he said.
    "It seems in parts of Wellington, it's a sellers' market. That trend started last month and it's been reinforced this month."

    Queues of people lining up early outside of open homes is one sign of people's desperation, new home buyer Fraser O'Connell says.
    Another is the amount people were forking out above a property's sale price.
    The 30-year-old plumber had to pay "more than I was wanting to pay": $60,000 above his new Ascot Park home's rateable value.
    But he had heard of people paying up to $150,000 over rateable value.
    "Further into town, you hear that all the time.
    "There was a lot of competition out there. I'd go to open homes on a Sunday and I'd get there ten minutes before it's due to start and there was already a queue of people out on the footpath wanting to get in."
    In the six months he spent looking for a house, O'Connell found the tender process especially frustrating.
    "If this house hadn't been at auction, it would have been snapped up really quickly. I think I was pretty lucky," he said.
    "I've got mates who were looking for over a year."

  • #2
    Don't these buyers know that rateable value, even if recent, is only marginally related to any specific property?

    At least the plumber recognised he had some sort of a limit - what he wanted to pay.


    • #3
      RV's have been close to accurate in Wgtn for the last 5 years or so. For most houses anyways. We just had a new round of RV's and both of ours only went up marginally. But then we'll not in the south & eastern suburbs - we'll in the northern suburbs. And we don't own villas.

      Helping NZ authors get their books published


      • #4
        Sounds like bullshit to me.
        I think that reporter has taken too many drugs.


        • #5
          Most of the region according to the stats evaluers etc hasn't moved much. A few examples of houses in some prime sort after areas, likely with 100k renos on top of them, selling for a few 100k over gv is believable, prices in central suburbs have been edging up for a long time though. So agree the news articles is more about creating a headline and cherry picking examples. Simply watch what's selling across large number sets (not single examples without even knowing state of reno before sale) to gauge market which is NEVER done in news articles (reality too boring often for them so they make asertions based on the slimmest evidence)


          • #6
            No sign of it in Tawa.....


            • #7
              A lot of sign of it in Titahi Bay at the moment. I know of three properties that went around 25% over GV, 300k house selling for 400k


              • #8
                Originally posted by kiwibean View Post
                A lot of sign of it in Titahi Bay at the moment. I know of three properties that went around 25% over GV, 300k house selling for 400k
                That would be 33% over


                • #9
                  I know but many have been around 25%, that one example is 33%