Official figures record an almost flat 2011 for Wakatipu residential real estate – but agents are looking on the bright side.
Despite home and section sales rising by just five per cent in number, and median house prices also increasing only five per cent, local Real Estate Institute of New Zealand spokesperson Kelvin Collins believes the market has consolidated.
“What 2011 indicates to me is that the worst is behind us,” Collins says.
“Median sale prices are up, sales volumes are up and total sales values are up – even though it’s only sort of five per cent, it’s still a rise.”
Collins says his enthusiasm was sparked by the final three months of last year, with a noticeable increase in buyer confidence and enquiries.
“There’s good money around and if the property is right, people are prepared to spend the money – but if it’s not quite right, they’ll walk away from it,” he says.
Collins also cites a big jump in the number of $1 million-plus deals – 66 in 2011 compared with 45 in 2010.
After a sales spike last April, which Collins attributes to a clearance of Jack’s Point sections, the overall market “seemed to be going OK” – but then came the run-up to the election and sales tailed off again.
Yet this time last year Adrian Snow, Collins’ REINZ predecessor, told Mountain Scene the worst was over.
“The trough of the market is now well and truly behind us and buyer confidence levels are noticeably increasing,”
However, his successor nails the big change between 2010 and 2011 – mortgagee sales.
“The 2010 year saw a lot of mortgagee sales and probably a lot of uncertainty as to what true value levels were,” Collins says.
While 2011 still saw some sections and apartments dumped by banks and finance houses, “the majority of mortgagee sales were already out of the system”.
“Mortgagee sales take people’s confidence away,” Collins believes.
“Everybody’s looking for a bargain so motivation becomes money-driven rather than what’s the right property for the needs of the client.”
With frequent mortgagee sales now a thing of the past, Collins says the Wakatipu market can “now look forward
with more confidence”.