Real estate agents hopeful as prices continue to fall

PHOTO: Real estate agents. FILE

While Auckland houses are losing value for the first time in years, the city’s housing market is far from crashing, according to local realtors.

CoreLogic’s House Price Index showed property values fell another 1.8 percent in August, twice the rate of July’s 0.9 percent drop.

Sophie & Wallace Real Estate spokesperson Wallace D’Costa said he had seen it all before, and did not buy the hype.

“In 15 years of real estate, I’ve seen the market go up and down, up and down,” D’Costa said.

“At the moment, the market is slightly down, but there’s something about New Zealand that keeps holding the value of property up. I can’t see it crashing.”

CoreLogic and realestate.co.nz say Auckland buyers had more power today than they have had in the past few years.

Realestate.co.nz spokesperson Vanessa Williams said sellers needed to step up their game to attract buyers.

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“What it means, if you’re trying to sell, is that you need to market your property well,” Williams said.

“It also means you’ll have to negotiate with buyers because there’s just not as many out there and they’re taking longer to make decisions.”

“For buyers, it means you have more time to transact, and it means you have more options available to you.”

But that did not mean Auckland’s market would suddenly become affordable, she said.

“We’ve seen prices climbing to astronomical levels, and it was really an unsustainable market,” she said.

“While it can be a little bit daunting to hear that prices are pulling backwards, it’s actually just pulling back to where it would be in a more normalised market.”

Proppy Real Estate spokesperson Mercy Espinola said $800,000 still would not get buyers far in Auckland’s housing market.

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“Properties that are priced at $700,000 to $800,000 aren’t up to the standard,” Espinola said.

“Before, [that money] could get you a bit of land, and a nice structure, but now… what can you get for $700,000?”

CoreLogic put the average value of an Auckland home at $1,400,000 – even after a 4.6 percent dip in the last quarter.

A bit further south, Hamilton’s prices remained steady but locals were hoping they would start dropping too.

“I’ll be waiting a bit longer,” said one resident. “I think the prices will go down even further.”

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“I think the prices are rubbish,” said another. “They’re unrealistic.”

But CoreLogic head of research Nick Goodall expected prices to bounce back, albeit slowly.

As interest rates plateau, and eventually drop, Goodall expected sellers to take back the advantage.

“The key question is: where to next?” he said. “I think there’s cause for optimism as we get to this point where interest rates are expected to peak.”

Lower interest rates would change buyer sentiment, and lead to more demand, he said.

“We might see the arresting of these falls later this year, and certainly into 2023.”

It could take time for prices to rise again, but sellers should not panic, he said.