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Number of home appraisals increasing in Hamilton market

An increasing number of homeowners are seeking property appraisals to find out what their homes are worth in the current market according to Hamilton real estate agency, Lodge Real Estate.

Lodge Real Estate Managing Director, Jeremy O’Rourke, says October was a quiet month for Hamilton real estate agents, with school holidays affecting activity. But he says appraisal requests have increased considerably.

“Residential property prices have decreased steadily this year and while they are still trending down slightly, I believe we are close to seeing prices level-off. After coming off a few years where homeowners watched their property values rise month-on-month, people now want to know realistically what their property is worth in the current market,” says O'Rourke.

While it is speculation, O’Rourke said as people look toward their mortgages coming off lower interest rates, some may be starting to think about their options - weighing up staying put versus trading down into a more affordable property.

The Reserve Bank Financial Stability Report, released this week, says about 40 percent of New Zealand’s current mortgage stock is made up of people who took out mortgages between 2020 and 2021, when interest rates were at an all-time low and house prices soaring. Around half of the total stock of mortgages on fixed rates are expected to reprice in the coming year and around two percent of total housing stock is currently in negative equity. The report warned this percentage could rise further if house prices continue to fall.

“In Hamilton we aren't expecting a mass sell-off as people’s mortgages roll off fixed rates. That’s because the banks stress tested those mortgages to around six percent originally. The vast majority of homeowners with mortgages should be fine at the higher rates. However, there will always be some homeowners who panic, especially if they’ve over-extended themselves on other expenditures,” says O’Rourke.

The Hamilton market currently has 940 properties for sale on which is up on the 466 properties for sale in October 2021.

O'Rourke says Lodge was seeing a few investors exiting properties because they were over-committed, but it was limited to a select few.

“While investor exits are limited at the moment, if interest rates climb much above eight percent, we might see this activity pick up.”

O'Rourke says the market is in a totally different place to where it was in October 2021 when virtually nothing could affect the market’s appetite to buy and sell.

“In October last year buyers were being forced to act quickly or miss out. There was a heightened urgency in the market. Now both buyers and sellers are being cautious and slower to make decisions,” says O’Rourke.

He says Lodge Real Estate agents are also noticing an increase in the number of new migrants buying properties - a trend that has been predicted by many for some time as New Zealand’s borders reopen and migrants begin to return.

“We are seeing a lot more migrants showing interest and buying properties in Hamilton. Buyers from different parts of Asia have been particularly active these past few months,” says O'Rourke.