House prices in Nelson region are “cooked” with second home local buyers being priced out of the market by cashed up out of town retirees, according to a local agent.
The assesment comes as it is revealed that Nelson is bucking the national property trend by having a record all-time average asking price combined with an increase of listings.
According to realestate.co.nz, the average asking price in Nelson is now $686,963, up 7.6 per cent compared to January 2018. There are seven other regions that have had all-time high asking prices, but all of those also had a fall in listings during that same period.
However, realestate.co.nz says that Nelson is the exception with a jump of 13.3 per cent of new listings, when compared to January 2018.
Tall Poppy’s Simon Collins says the situation is difficult, particularly for people selling their first home to buy another.
“I think we are quite cooked with the prices. We have still got people from other parts of New Zealand and they can afford the prices, but second home buyers competing for the same properties are having trouble.”
He says when people start repayments for a mortgage on a $680,000 house it can be “quite debilitating”.
“Our incomes haven’t kept up with the price of housing. That gap is just getting harder.”
Kate Bradley of REMAX says there are far more buyers than sellers and sellers are reluctant to let go of their own property unless they know exactly where they are going.
There were not many properties available for between $500,000 and $650,000.
However, she says that local buyers can still compete with those coming from outside of the region but the difficulty is when a buyer gets pipped at the post by those who are cashed up and ready to spend.
“Our second home buyers, they are sitting with their own home and they still have to make it conditional.
“The sellers are saying ‘why am I going to wait for that when I can take Mr Tauranga’s money?’
“It’s a harsh line.”
Kate says she recently had a second home buyer decide to rent for a year because they couldn’t find anything they liked.
“That’s fine and dandy – but what happens in a year’s time when you can’t afford the type of house?
“You have to buy and sell in the same market.”
Vanessa Taylor of realestate.co.nz says the eight regions with all-time high asking prices “paint an interesting picture”.
“Typically, they have experienced a fall in new listings, and have low overall stock levels, which has helped vendors command handsome prices for their properties.”
Despite this fall in houses for sale across the country, Vanessa says that property seekers were still heavily interested in the market, with realestate.co.nz registering 1,126,076 unique users who were browsing for property in January.
“The Kiwi passion for property is alive and kicking,” says Vanessa.