Economist warns house-sellers will need to adjust price expectations

PHOTO: Brad Olsen

Infometrics principal economist Brad Olsen warns those who are thinking of selling their homes might have to reevaluate how much they are willing to sell for.

Olsen told Newshub Live at 8pm on Thursday that with high interest rates, borrowers aren’t able to get as much cash as they previously did – “in fact quite a lot less”.

This means buyers are going into the property market with less cash in their back pocket, so those who have their homes on the market will have to drop their expectations.

“Sellers are going to have to quite significantly adjust their expectations around how much they might get for their house,” he told Newshub.

Olsen said sellers will have to start thinking about when the right time is to sell.

“The question for some sellers will be, do they try and get in now and sell their house before things get even worse, or do they hold out because they don’t see it to be worth quite as much.”

Olsen told Newshub that Aotearoa’s housing market momentum has “completely shifted”, with Auckland seeing a fall in house prices and a decline in the space of five months.

“With that change in momentum and the shift in the housing market and very high interest rates, all bets are off in terms of just how quickly things continue to go down.”

He said other centres across the motu, like Canterbury, are still holding momentum, but for Wellington, he is “seeing quite a substantial downshift”.