Real Estate Market Stabilising

Real Estate Market Stabilising

First National Groups nationwide market activity indicators show a stabilising picture in July, with more contracts signed and buyer interest continuing to climb.

In First Nationals monthly office survey, 48% of its offices reported more overall activity in July than the previous month, 37% the same amount and 15% reported less activity.

Over 50% reported more contracts signed than the previous month while 20% reported fewer contracts signed.

This compares with Junes survey where 30% of offices signed more sales contracts than May and 37% signed fewer.

Property market indicators measured by First National are website property views, open home attendance, buyer enquiry, number of listings and number of contracts signed.

Regionally, stronger market signals were reported by South Island offices, with 63% reporting more contracts signed in July compared with June, and just 10% reporting fewer contracts signed. Forty-five percent of First Nationals North Island offices reported more contracts signed, and 20% had signed fewer contracts.

Severe shortages of listings reported two months ago were easing in most regions. Activity at the lower priced end of the residential market continued to dominate with mid-range properties in least demand. Section sales in Nelson and Marlborough were notably busier.

First National General Manager John Stewart said the market has continued to improve consistently since the Group had noted a significant shift in buyer enquiry in December and January.

Commentators laughed at First Nationals conjecture that the market would pick up from later in February, but we have been proved right.

Web activity shows buyers are researching for a long time before theyre putting their hand up and they are still being selective.

Website visits are currently at an all time high for our Group for this time of year. Whenever we see a major shift here, several years of tracking shows the sales lift follows about 6 weeks later and again this has proved to be the case.

This kind of interest in open homes and offers presented in the coldest winter that many parts of New Zealand have had for 30 years attests to the confidence of the buying public.

Stability in interest rates was a factor. With the likelihood that interest rates will sit around present levels until later in 2010, people are making decisions, Stewart said.

Buyers our offices are dealing with now seem prepared to take the 6 or 12 month interest rates to enable them to make financial decisions. A case in point is someone with a mortgage of $200k coming off a fixed rate of 8.2% and onto one of the six or 12-month rates, can save themselves at least $150 a fortnight. That in turn enables them to upgrade their home if they choose.

Of course, banks scrutinize very carefully who they are lending to and that is as it should be he added

Consistent enquiry from overseas, a north to south drift in some market sectors and pent up demand from buyers was also propping up demand.

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