If you were thinking of selling, you might be feeling a little uneasy about the comparatively sudden turn in the market and negative news proliferating. Among the headlines:  the largest fall in residential house prices in a decade, rising interest rates and predictions they will go higher and the tightening of mortgage lending to name a few themes.

On top of this we have an environment in which the Government, indicating it wanted to help first home buyers into property, has instead helped engineer a market which is doing exactly the opposite. There’s no doubt that buyer numbers coming to open homes have fallen, especially in the medium and lower price brackets. And it is also fair to say that the market has changed from being a seller’s market to now giving buyers a better hand than they did last year.

But looking at Dunedin’s real estate market objectively, it is not all bad news and is still a good market to sell compared with 12 months ago and even better compared with 24 months ago.  This is despite Quotable Value advising that in the three months to the end of March this year, the average New Zealand house price fell 0.6%, the largest fall in a decade. In Dunedin the figure is more pronounced at around a 3% fall. But that comes after some huge increases. Consider that in March this year, Dunedin’s median sale price was $685,000.  A year ago, it was $621,000 and in March 2020, it was $520,000. The market could not sustain annual increases of 20% but we are still sitting at a much higher level than at any previous time. My advice is if you are thinking of selling, act knowing that the rate of price rises is slowing if not stalling and heading in a downward direction. So, this might still be the best market to sell in for quite a while to come.

For buyers, the news is obviously a little better than it was in 2021. In most price brackets the competition is not as tough and, if you have a property to sell, the market is much more open to selling subject to house sale than it was six months ago. We’ve also noticed there are nowhere near as many unconditional offers. This gives more buyers a better chance of making a winning offer and it gives unconditional buyers an edge in a generally less competitive environment.

After several years of dramatic prices rises, some might be wondering if the market is heading to a crash, either major or minor. Historically, Dunedin property values have not crashed. The rate of price rises has levelled out after boom times and some buyers who sought to sell soon after buying high have lost money. But at no time in the past 40 years at least could the Dunedin market be said to have crashed. As I have said before, property prices tend to run in cycles of mostly four to seven years. We are coming out of a price rise cycle that started at the end of 2015. The reasons for the change have been highlighted previously and while New Zealand and the world economy could be heading for a tough time, it would be a mistake to describe the end of a rather remarkable price rise cycle as a crash.