House purchasers saying 'enough'

There are signs of a growing gap between vendor expectations and what buyers are willing to pay in the real estate market, an expert says. PHOTO/FILE

There are signs of a growing gap between vendor expectations and what buyers are willing to pay in the real estate market, an expert says.

Realty Services sales and marketing manager Karen Worley said that over the past month there had been purchaser resistance to increasing house prices.

''There are no signs of a slow-down in terms of increase in value, but what we are seeing now, and this is a real word of caution, is that there is the gap between what vendors want for their property and what purchasers are prepared to pay,'' said Mrs Worley.

She said vendors' high expectations are the result of the hype in the market.

''But purchasers have had enough and are saying 'this is the level at which we will stop', and so there's a fair amount of negotiation happening again.''

There were fewer houses sold in Tauranga, Mount Maunganui and Papamoa in the first three quarters of 2016 compared to the same nine months of 2015.

In Tauranga, the number of sales for January to September 2016 was 1494, down slightly on the equivalent 2015 figure of 1502.

In the Mount and Papamoa area, the drop was more significant - 967 sales so far this year compared to 2015's 1032 - a 6.3 per cent fall.

Sales in Tauranga peaked in March 2016 with 226 houses sold during the month. The peak in the Mount Maunganui/Papamoa region was also in March, when 160 houses changed hands.

In Tauranga, there was a clear demarcation between the first four months of the year when each month out-performed the same month in 2015, but the opposite was true for the next five months.

In the Mount Maunganui-Papamoa area, sales in all but one month - July - were up on the same month in 2015.

Mrs Worley said the figures for Tauranga are indicative of the fact that there has been a shortage of listings across the city.

''So the sales haven't been high because of the volume coming to the market. We are seeing that correct itself in Tauranga, but not in the Mount yet.''

The correction, she said, is the result of the time of year.

''Traditionally we've seen listings rise between September and December and it's trending that way right now, so it does give me confidence.''

The median house price in Tauranga rose from $440,000 in January to $553,000 in September. In the Mount/Papamoa area, the rise was from $580,000 in January to $657,500 in September.

First National, Mount, Tauranga and Omokoroa owner Anton Jones said the market was still very bouyant.

"The two years are pretty even, demand is still going well. Buyers and sellers are still there. The listings are a bit short, they are starting to dry up.

"It will be interesting to see the end of the year in terms of numbers."

REINZ district forum leader and Bayleys Tauranga manager Dickie Burman said it was late
2014 when the market really started to strengthen, but it seemed to have slowed a little.

"It has been going steadily for quite some time so I guess at some stage the market does have a breather."

He said the government's introduction of Loan to Value Ratio (LVR) restrictions, pre-empted by some of the banks, has affected the investor market.

"If you watch what's selling, as I do, a lot of that investment property has slowed up and that will be to do with the LVRs."

Banks requiring bigger deposits and increasing property prices means people are finding it more difficult to come up with deposits, he said.

"So that's going to affect volumes as well, because people are going to have to save a bit longer."

However, there are still areas where the market remains strong.

"I think if you look at the home market, people are buying and selling family homes, moving up, moving round for schools and work and that sort of thing - that market is still pretty strong."