Buyer FOMO re-emerges with decrease in Hamilton properties for sale

With the number of real estate listings in Hamilton dropping significantly over May, buyers are starting to show increased urgency in securing one of the limited number of properties available before the market potentially turns.

Lodge Real Estate Managing Director Jeremy O’Rourke says that the number of properties for sale in Hamilton as of the end of May was down to around 830, compared to 880 in April and 920 in March.

Jeremy sees first home buyers in particular showing confidence in making a purchase, and the fear-of-missing-out (FOMO) that has been absent from the market is beginning to re-emerge.

“With the recent OCR increase by the Reserve Bank signalled as the last of the hikes we’ll see this cycle, buyers have interpreted that as a clear indicator that we’re at peak interest rates, and the market has hit its floor.

“So we’re seeing buyers identify that now is the time to get into the market.  They realise if they wait too long for the perceived bottom, buyers may find themselves once again in a competitive market as prices pick up.

“The number of offers we’re seeing has dramatically lifted since April’s dramatic slowdown that coincided with holidays, and while open home throughput fluctuates and has at times trended downwards, the quality of the buyers we’re seeing should soon translate to a rise in sales.”

This lines up with ANZ’s economists upgrading their house price forecast, tentatively predicting that housing prices may have hit their floor and could bounce back over the second half of 2023. They acknowledge that net migration and other factors impacting on housing supply and demand are the ‘wildcards’ for the outlook.

In addition, the loan-to-value ratio adjustments that came in from 1 June will assist first home buyers, who have maintained their record high market share. According to CoreLogic NZ, of all the main centres, Hamilton’s first home buyers’ market share has been the strongest at 33% for Q1 2023.

However, Jeremy notes that the lack of properties for sale is what will likely constrain the market, if more properties don’t come online over the winter period.

“Stock is the lubricant of the market, and vendors looking to trade up need to be tempted by available properties, therefore freeing up entry-level prospects for first home buyers.”

He adds that the ongoing inclement weather is making preparation for sale difficult, but cautions potential vendors who may be waiting for a hopefully settled spring before listing.

“Entering into a ‘waiting game’ could be a gamble for vendors if the market gets flooded come September.

“Despite the pressures on both essential and discretionary spending, higher mortgage rates and an upcoming election in the mix, buyers are active now, building momentum and ready to make offers. Savvy vendors would be wise to take advantage of that now, as multi-offer situations increase in frequency.”