PHOTO: FILE
Real Estate Market in Palmerston North Faces Downturn Amid Low Buyer Interest
The real estate market in Palmerston North has significantly declined, with a notable drop in buyer activity and diminishing seller confidence. The latest figures from the Real Estate Institute of New Zealand for June reveal that only 77 houses were sold in the city during the month, a number described by institute ambassador Andy Stewart as “pretty low.”
Stewart highlighted the challenging environment for real estate agents and sellers, noting, “Considering how many agents and listings are out there, it’s hard times to get buyers ready to transact when there is no urgency for them to do anything.” Currently, there are 418 properties being advertised in the area.
One factor contributing to the slump is the typical seasonal downturn during winter. However, the sales volume has plummeted from 121 in May and is also significantly lower than the 113 sales recorded in June of the previous year.
Despite the drop in sales, house prices have remained stable. The median price in June was $635,000, closely matching May’s median sale price of $632,000 but still $105,000 below the median rateable value of $740,000. Stewart pointed out the difficulties sellers face in attracting offers that meet their expectations in what is clearly a buyers’ market. “If you don’t really need to sell, why would you?” he questioned, emphasizing that sellers need to be realistic about pricing.
On average, properties are taking 51 days on the market to sell. Stewart attributed the market decline to several factors, including the current economic situation, challenges in securing mortgage finance, concerns about job security, and perceptions of high interest rates.
“The new regulatory changes, including debt-to-income ratios, loosened loan-to-value ratios, a more relaxed bright-line test, and changes to interest rate deductibility have yet to impact the market,” Stewart noted.
In nearby Feilding, the market experienced a substantial drop in activity with only 18 sales during the month, down from 30 the previous month, amidst 126 properties currently on the market. The median sale price in Feilding fell significantly from $615,000 to $550,000 in just a month, aligning closely with the median list price and slightly below median rateable values.
Similarly, in Levin, there were 23 house sales with a median sale price of $510,000, and properties took an average of 69 days on the market to sell.
While the market faces numerous challenges, the stability in pricing offers a glimmer of hope for both buyers and sellers navigating these tough times.
SOURCE: STUFF