Big predictions impossible, short-term analysis crucial for property market this year

Making long-term predictions in the current residential property market is proving difficult, according to Lodge Real Estate Managing Director Jeremy O’Rourke.

While January was “a case of January being January” with sales off to their usual slow start to the year, Jeremy says identifying future trends in the market is becoming harder than it was even a year ago.

“We’re seeing a variety of external forces combining to have a real impact on the residential property market, which is translating into buyer hesitancy. We’re still very much in the midst of a housing crisis, investors are still waiting on the fringes for new Government regulation to be finalised, and people are keeping a watchful eye on global happenings to see if they’ll have a trickle-down effect here.

“Where it used to be ‘January is slow every year and February picks up soon after,’ now it’s a case of closely watching enquiry, sales and listing data monthly, and sometimes weekly, to determine short-term market movements. We anticipate this will be the case throughout 2024.”

Residential sales for Hamilton in January were 109, the same as January 2023. According to realestate.co.nz, the lowest sale was a Paul Cres property for $332,500, and the highest a Bankwood Road property for $2.1 million. The median house price for Hamilton is currently sitting at $730,000, down from $773,000 in January 2023.

The majority of sales in January, 63%, were for homes under $800,000, indicating first home buyers were the most active group of buyers that month.

Jeremy expects February sales to be much higher as people return from summer holidays, children are back at school, and people have more time to think about their next property move.

“We’re still transacting a lot of first home buyers as well, a process that typically takes longer than a second or third home buyer, so, we should see these stats flow into February.

“First home buyer activity is a positive sign because they generally kick off second home buyers, third home buyers and so on, which stimulates the market overall.”

Lodge Real Estate agents are reporting an increase in inquiries and activity, a trend Jeremy says has been building since late 2023.

“There’s heightened intent in the city’s residential property market. Plenty of people are watching what’s happening and doing their homework. Investors are waiting to see how the interest deductibility rules will play out for them.

“On a positive note, we are expecting a higher volume of sales than we had in 2023, with people returning to the market looking to transact and buy again in Hamilton.

“Our team is positive about the year ahead, but, again, as for making any big predictions, especially amidst the turmoil many parts of the world are facing, we’re cautioning our team and our clients to take it month by month.”