Buyers need to prepare now to act later. Photo / Getty
Buyers need to prepare now to act later. Photo / Getty
A stock shortage could soon cause a "bottleneck" in the Bay of Plenty property market and buyers are being encouraged to start making decisions as competition heats up.
Buyers need to be prepared to act quickly and put in the best offer as the fast turnover of properties means thereis no time to muck around, Rotorua real estate experts say.
The latest Real Estate Institute of New Zealand monthly report showed listings were at the lowest for a June month since records began.
REINZ regional director Neville Falconer. Photo / Supplied
Regional director Neville Falconer said a "fear of not finding anything" had resulted in many property owners reluctant to list their property for sale unless they found something they wanted to buy first.
Falconer said the stock shortage meant competition was strong and buyers were acting quickly when properties hit the market.
"Open homes are busy and median days to sell are down to 34 days for the Rotorua District, from 74 days in June 2020."
Rotorua's median house price had dropped just 1.3 per cent since May to $587,500 from $595,000 but climbed 23.4 per cent in the last year from $476,000.
Sales volumes for the district had dropped 17.2 per cent from 99 properties sold in June 2020 to 82 properties sold in June 2021.
"However, this is likely due to the ongoing shortage of stock that we are seeing in the wider Bay of Plenty."
Managing director of the Realty Group, which operates Eves and Bayleys, Simon Anderson. Photo / NZME
Managing director of the Realty Group, which operates Eves and Bayleys, Simon Anderson said Rotorua's sales volumes were steady but a shortage of listings was putting pressure on the market.
"We're seeing a number of people are looking to either upgrade, downgrade, and move but they can't find any property to go to. So they are choosing to do nothing.
"We're coming to a point in the market where the lack of listings is really starting to impact the market as a whole.
"We could very soon see a bit of a bottleneck."
Anderson said decisions will have to be made before a sudden spring rush as properties flood to the market and he encouraged people to keep their options open about selling.
"There is still good strong demand for property in Rotorua.
"We've seen some significant capital growth over the last 12 months and a lot of first-home buyers and investors who still see good value in Rotorua."
First National Rotorua principal and Real Estate Institute of New Zealand Rotorua spokeswoman, Ann Crossley. Photo / NZME
First National Rotorua principal and Real Estate Institute of New Zealand Rotorua spokeswoman, Ann Crossley, said June's property data was telling the "same story, slightly different picture" due to low stock levels.
"And that doesn't look like it's improving any time soon."
"In the last two weeks, anything new coming on the market is attracting multiple offers.
"There is quite a lot of first-home buyers out there and some investors are cashing up."
But first-home buyers and investors were not adding to the property pool.
"That's why the lid on the listings keeps dropping."
Tremains Rotorua sales manager Megan Davies said a drop in days to sell to 34 from 74 year-on-year meant buyers and sellers must be decisive.
"Sellers should disregard all talk of 'spring is the time to sell'," she said.
"Why set yourself up with all that competition? Sell now and buy when there is more stock. You can always have a long settlement date."
Davies said buyers needed to get themselves in a fairly clean unconditional purchase position so they could act quickly and put in the best offer.
"This fast turnover of properties hasn't really got time for subject-to-sale clauses (though they do happen) so buyers can look at bridging finance so they don't miss out.
"Look at auctions as the best way to get competition in the room – the emotions run high, and buyers are ready."
Davies said the drop in sales volumes year-on-year wasn't big but showed on the back of a vibrant May selling spree there was limited stock to choose from, which was pushing prices up.
"However, we can predict that now is a great time to buy before interest rates rise and before the spring bonanza happens."
