11 January 2022
Record property prices end 2021. What's in store for 2022?
Going, going, gone! No, we’re not talking about the thousands of Aucklanders crossing the border, nor are we talking about the record number of homes sold at auction. We’re talking about 2021!
Another year has flown by. A year with some of the hottest property prices the market has seen, a year of increased auction sales as we navigated yet more lockdowns, and a year of growth for the Lugtons team in our Hamilton and Cambridge offices.
Lugtons Managing Director, Simon Lugton, reflects on the stand out themes of 2021 and discusses what we can expect in the year ahead.
More choice for buyers
There are properties aplenty in the Waikato market and with this greater supply comes more choice for buyers. Last year in November, new Hamilton listings were 30% higher than the next best month of the year. This figure reflects a nationwide trend. As data from REINZ shows, the total number of properties available for sale in New Zealand increased by 5.1%, from 18,319 in November 2020 to 19,260 in November 2021.
“Despite record numbers of properties for sale, demand still outstrips supply, which continues to push prices up,” says Simon.
“At the end of last year, Waikato reached record median prices, increasing 27.6% from $670,000 to $855,000. That’s a significant jump and one that is occurring across the range of properties our team have for sale.”
Greater security for sellers
The increasing number of properties on the market, combined with record prices, is good news for sellers, giving them greater security of purchasing a property once they have taken their current one to market.
“When the market first started to soar 18 months ago, there was caution among buyers who would have to buy and sell in the same market,” says Simon.
“That no longer seems to be the case, but what we do expect will start to happen is that vendors will take slightly longer to list their property now there’s no longer the fear of missing out on a high sale price.”
Tougher lending restrictions
While the market has continued to deliver on expectations over the past 12 months, the real change has come in lending, creating yet more financial hurdles for buyers.
“Tougher lending restrictions are unlikely to change, particularly as Government measures are aimed at moderating the New Zealand property market,” says Simon.
“This will continue to make it hard for first home buyers as there will be more risk associated with subject-to-finance offers. Unconditional offers will likely be valued more highly, even if the amount is lower than a conditional offer.”
Simon says that’s where working with a local sales consultant can be beneficial. “Our team’s understanding of the market and their insight into current listings means they can introduce first home buyers to potential properties that will likely tick a few boxes,” he says.
Looking ahead to 2022
With 2021 behind us, what might 2022 have in store for the Waikato property market? All eyes are looking north to Auckland buyers. After more than 100 days in lockdown, it stands to reason that some buyers will want to vacate the City of Sails on a more permanent basis to avoid a repeat of the enforced time at home of 2021.
“We certainly expect Waikato vendors to benefit from Auckland buyers now physically visiting the market after months of absence,” says Simon. “And the greatest benefit will probably be in the Cambridge and Waipa market. This is where we have the highest proportion of Auckland buyers and that’s only likely to increase.”
On the whole, it continues to be exciting times for the Waikato property market as the region sees significant infrastructure investment and ongoing development, and cements itself as a key location in the golden triangle. With all that set to continue into 2022, we expect this to be reflected in the market.
Is selling or buying one of your New Year resolutions? Give our team a call today. Lugtons sales consultants live in and know the Waikato property market and can help you achieve success in 2022.