With the uncertainty of the election over, New Zealand homeowners and buyers are hoping they can look forward to a prosperous 2012; but with unsteady European markets, it is unlikely the New Zealand economy and housing market will remain unscathed.
Property industry heads give Gill South their views of the current situation and what might be in store for us next year.
Mike Bayley, managing director, Bayleys Real Estate
The pendulum which reflects economic and social confidence in New Zealand continues to swing markedly between optimism and pessimism at increasing speed.
No sooner had the All Blacks lifted the Rugby World Cup and the ticker-tape parades were held, than the spectre of a general election campaign appeared and news of financial instability across Europe hit the headlines once more.
The cup was followed by a surge of new residential property listings. Data reflecting this comes not from any Real Estate Institute of New Zealand (REINZ) monthly reports, nor data from QV, but by simply reading through HeraldHomes or the 'Houses for Sale' supplements in the daily provincial newspapers.
The increased number of listings has been plain to see. With a mix of four-week auction campaigns and traditional price-attached marketing, the natural flow-on results from this listing influx may take another few weeks to filter through into sales statistics.
However, the traditional spring 'flood' has been more a gradual building of activity this year - albeit a month or so later than usual because of the Rugby World Cup. The rise in listing activity has come across the board from $300,000 entry-level homes to high-end $1 million-plus residences.
New Zealand has weathered the current round of global financial jitters far better than many of its trading partners, partly buoyed by the diversion of attention to the Rugby World Cup tournament and associated partying. However, attention is now firmly back on more serious issues.
What will be interesting to see is the strength and depth of the log-jam of home buyers who have been bereft of choice for the past quarter. Anecdotally, we know that their appetite is sound and well-financed. The unknown factor is their fortitude in converting this appetite into transaction numbers.
Peter Thompson, managing director, Barfoot & Thompson
What will affect the Auckland housing market in the run-up to Christmas and in the early part of next year most is the modest number of new homes listed for sale. It is creating a tight market.
For the past six months, the market has been stable, with the number of homes being sold remaining constant on a monthly basis. Prices are edging up marginally and days to sell are in the low 30s.
A good guide as to the overall movement in prices this year is that, at the end of October, our average selling price for the 2011 year-to-date was more than $537,000, which is up about $7000 on the average price achieved during 2010.
With the coming of spring there has been greater activity, which is attributable to the seasonal change and prices are remaining marginally above last year's.
As auctions are scheduled right through to the Christmas holiday, we are expecting to sell more homes in December than has been the case in the past few years.
While the early part of 2012 is unlikely to see any material change to trading conditions, further down the track the prospects for a more active market are positive.
Given the forecast population growth of Auckland, the city faces a major shortage of accommodation and this will undoubtedly affect house prices in the more popular locations. In part, this can be seen in current sales, with suburbs ringing the central business district, the coastal suburbs and those in the main transport corridors attracting higher price increases than across the city as a whole.
Homes with values in excess of $1 million remain in strong demand. Past trading patterns show that as the state of the national economy improves and confidence grows, people will act on their housing plans.
Hayden Duncan, chief executive officer, Harcourts Group
New Zealand was gripped by the Rugby World Cup for three months and this has been reflected in the real estate market's activity. In New Zealand, we make decisions based on how we feel and we act on feelings of general confidence.
With the population about to embrace summer and the up-and-coming abundance of outdoor events and festivals, there's happiness. Low interest rates and the glow of our Rugby World Cup win also give us a lot to be positive about. Will this translate into a continued strengthening of the real estate market in New Zealand? We think so.
In the New Year, all eyes will be looking to Asia and Europe. For New Zealand, our economy will be affected depending on how these two markets perform.
If Asia struggles with further economic decline, export and funding lines may become more difficult. If Asia and Europe see their way through, New Zealand will be well positioned for economic growth and that will flow through to all property markets, especially the residential and rural sectors. This will benefit the broader New Zealand economy and the real estate markets as people's confidence in employment returns. With interest rates likely to remain reasonably low and no indications on the horizon to suggest a rise, the concern is still for the residential construction industry.
Reports of two to three years of inactivity are threatening a further housing shortage crisis. This will result in upward pressure on house prices due to simple supply and demand factors.
With the election now over, regardless of your political preference, continuity of government can only be a positive from an economic point of view.
Carey Smith, chief executive, Ray White, New Zealand
The real estate market continues to show improved signs for all sectors within property sales thanks to the continued low Official Cash Rate (OCR) of 2.5 per cent, steady immigration numbers coming to New Zealand and the National Party's return to government with an increased majority.
Prices have continued to firm, particularly across Auckland, where the average sale price has lifted during the past two months and is now $475,000, an increase since the beginning of the year of just below 4 per cent. The numbers of sales across Auckland has remained consistent during the past three months to be just below 2,000 per month and we expect this trend to continue throughout the final months of 2011 and during the first quarter of 2012.
Interestingly, there has been an increasing amount of property marketed by auction. It is at a record high of 26.4 per cent. Across New Zealand, sales numbers have also remained just above 5,000 per month and the average sale price has increased from $340,000, at the beginning of 2011, to $359,000 in October 2011.
It is expected the OCR will remain at 2.5 per cent at least until March 2012. This will continue to give confidence to firsthome buyers and investors, and will in turn keep the market remaining active in the second and third-home buyer areas.
The recent capital valuations received by property owners throughout Auckland are a definite reflection of the continued activity that has occurred in certain areas of the city. The outlook for property prices over the next period remains strong. With houses for sale having fewer days on the market and an active buyer pool, this should continue to drive sales across all sectors.
Keith Niederer, general manager, LJ Hooker & Harveys Group
The New Year market will be steady as it goes, there will be no records set for sales volumes. The European economy is in disarray which means interest rates may temporarily remain at current levels through the early part of 2012. Stock levels will increase as many owners assess their position.
Many Kiwis are reluctant to take on more risk borrowing on their existing family home - due to the expected impact of rates increases, petrol and the general cost of living.
The lessons learned over the past five years mean most homeowners will take a consolidated, conservative approach. With the European situation and our current exchange rate, more expats will see New Zealand as a safe haven, with more returning and investing back in New Zealand.
2012 will bring more first-home buyers to the market. Affordable interest rates and well-priced stock make common sense for first-home buyers to explore their options to purchase.
If you are contemplating listing your property on the market - let the marketplace, the buyers, value the property. A no-price strategy coupled with a date for a result means you have the opportunity to realise a premium price. Presentation and marketing will be more important than pricing in 2012, with the possibility of having multiple buyers competing. Well-presented homes are achieving quicker sales and often at premium prices. So the message is: no-price marketing and top presentation are key factors to produce a sale.
If you are in buyer mode, do your homework. If you see the property that ticks the boxes for you, move with confidence as time and time again we hear the old saying "we should have, we could have, we nearly did".
With a shortage of 30,000 homes across the nation, the cost of renting or buying is going to go only one way with material and building costs also moving up due to the demands from the Christchurch earthquake, Auckland's continued growth, and exports of building products. Now is the time to buy and sell.
In balance, it is a good time to buy and sell as the summer months of February, March and April traditionally have been very active.
2012 will see quality listings available in all price ranges with anything in Auckland under $600,000 being particularly sought-after by first home buyers and astute investors.