Nelson Tasman QV Home Value Market Update August 2016
Market Commentary
Nelson home values have increased by 13.9% year on year and 4.2% over the past three months. The average value in the city is now $473,624. The Tasman District also increased by 9.2% over the past year and 2.9% over the past three months, with the average value in the district now $463,596.
The local property market is being stimulated by three key factors being low interest rates, lack of properties available for sale in the region and strong investor interest. The reduced cost of finance in the current environment and perception that interest rates will remain low in the short-medium term has given the market confidence and increased demand as a result. We consider the reduced cost of finance to have a direct correlation with the lack of properties available for sale in the region as this has fuelled the investor market and in particular mum and dad investors who can utilise the equity in their own home and purchase a rental property with rental returns typically above the cost of finance. The lack of available listings is also a typical trend for Nelson/Tasman in winter with more properties coming on to the market in Spring when the gardens are tidy and more presentable.
Given the strong nature of the market we are noticing that a lot of buyers to be competitive in the lower-median price bracket need to present unconditional offers. The lack of due diligence in some cases has seen buyers encounter problems after the fact. These can include purchasers either paying too much for a property without obtaining a market valuation, finding building faults as a result of not obtaining a building report or experiencing issues in relation to title, zoning or contamination issues.
Nelson/Tasman is seen as having a relatively stable property market with a diverse range of industry and stable job market. Nelson recently had strong Gross Domestic Product (GDP) results published which shows GDP from June 2015-2016 at 4.40% compared with the national average at 2.70%. This is on the back of the strong tourism sector.
The QV House Price Index is calculated by analysing the average sales price to capital value ratio for sales over the last three months which is applied to the entire stock to generate a current average value.
Building Consents
There were 71 building consents issued for new houses in July. There is a lack of available residential sections with new stages being snapped up soon after coming onto the market. A subdivision in Marlborough recently auctioned 40 sections, of which 32 sold.
Rental Market
The median rent in Nelson is sitting at $345 per week and in Tasman is at $357 per week. These are up on last month and show that the rental market is relatively strong considering the Nelson winter market is generally stable with limited rental value change. Seller’s who have sold their property but are yet to secure a new home may be applying some pressure to rental levels in this instance.
Lodged bonds are falling which is typical of a winter market.
Reluctant Sellers
As demand is greater than supply sellers consider it prudent to hold onto their own property until they have secured their new purchase meaning that they do not get caught without having a home and it negates the fear of rising house prices between selling and buying. Sellers are acutely aware that given the shortage of available listings it may be some time before something suitable comes onto the market. The demand for these properties often sees prospective purchasers miss out with multi offer situations becoming more prevalent.
Home owners in Nelson are taking advantage of low interest rates by purchasing a rental property while leveraging against their existing home. This means that they have the benefit of capital gains over multiple properties. This may be impacted by the 40% equity investor restrictions which have been recently announced.
Source: QV Home Value
About the Author: The above article on Nelson Tasman QV Home Values Market Update 2016 was written and provided by Brent Palmer, a local leader in the field of Richmond and Nelson Real Estate sales, marketing, advanced technology for home selling, and social media.
You can contact Brent Palmer here, or at 027 544 9921. He has helped many people buy and sell homes in the Nelson, Stoke and Richmond areas for years, and would love the opportunity to help you as well.
Thinking of selling your home? I have a real passion for helping people sell their homes in our Nelson and Tasman Region, as well as the marketing, social media & advanced technology for home selling that goes along with it. I’d love to have the opportunity to sit down with you discuss how we can work together to get you the best price.
I help people buy and sell real estate in the following Nelson and Tasman towns & neighbourhoods: Wakefield, Brightwater, Hope, Appleby, Redwood Valley, Mapua, Stoke, Tahunanui, Atawhai and of course, Richmond and Nelson City.
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