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I thought might be topical, with the Reserve Bank removing some of the lending criteria today, to give you all an update on the property market in Lower Hutt in particular. You're probably all sick of hearing about property – the media seem to love reporting on it. Here's my overview of the current situation.
There is still a shortage of properties – use TradeMe as an indicator of numbers. In Lower Hutt, there’s approximately 300 today, whereas 4 years ago we had around 700 for sale. So, it's a sellers’ market. In this kind of situation, tenders and auctions create competition. If a 'quick' sale is needed, a 'price by negotiation' can be the answer.
We have seen, and are still seeing, massive price increases in what has been normally seen as the 'cheaper' suburbs. First-home buyers are pushing up the prices due to several factors. Low interest rates at record low levels. The Reserve Bank changes today will help keep this end of the market bubbling along.
Also, buyers from Wellington have been forced out of the city and are now buying in suburbs like Wainuiomata, Naenae & Taita and Stokes Valley. Who would have guessed 3 or 4 years ago ex-State houses, built in the 40’s and 50’s, would be selling for half-a-million dollars – now 70 years old! (come on everyone ...admit 70+ is getting old...)
These homes were built very well with decent quality materials. Other than rooms tending to be on the smaller side, and the concrete tile roofs very heavy and now needing replacing in many situations, they come-up a treat if renovated.
The demand will stay, but I can't see prices raising like they have done. I believe they'll level out slowly over the coming year or so.
Mid-range suburbs like Avalon, Waterloo and Western Hills are being very popular – zones for the good schools being a deciding factor. Homes built in and around the 70s are being snapped-up if they are well presented and accessible. You will notice a lot of in-built 'town house' type properties popping-up on sections due to Council changes a while ago.
One example is at the roundabout on Waterloo Road before the rail over-bridge – there are 8 two-storied townhouses on one section where there was an old dairy and attached old house. People leading what's seen as 'busier' lives, not wanting big sections.
And the upper-price bracket, where homes around the million and more are selling quite quickly. A recent tender in Belmont in a 4-year-old street with quality homes, had 4 tenders and sold at over $1.3m – great for the owners. At that kind of level, buyers are generally wanting properties on the valley floor with better access.
There is a massive change to buyers wanting new homes. The appeal of new homes is driving that market. People are wanting new, double glazing, well insulated, nothing to do, and normally smaller easy-care sections.
The issue with the Hutt Valley is space. That's one reason why the Council had to change the rules around land size. No changes equals no growth. Hence the huge shortage of new, or the 'town-house' type homes. Many buyers are wanting to sell and downsize but don't yet want to move into retirement villages. They are having serious issues finding what they need.
So, if you are in this situation and lucky enough to have somewhere to stay in the interim, perhaps you're in a much better 'cash' position when something comes on the market – unless you get lucky with your timing.