Seize the demand and preserve your property asset
With an upcoming election and the OCR rate holding steady, we wanted to draw attention to the latest insights into the Marlborough property market. From rental dynamics to sale and purchase trends, there's a lot happening that could impact your property decisions. Let's dive into the details:
Rental Market Update
The rental market in Marlborough continues to see upward momentum. The average asking rent for a 3-bedroom house hovers around $565 per week. However, a noteworthy challenge is emerging. Listings for rental properties on Trade Me have dropped by 19%, yet demand has surged by 30%. This supply-demand mismatch is causing a shift in the landscape. Around 70% of landlords across New Zealand own just one rental property and are grappling with increased compliance costs, maintenance expenses, insurance, and rising interest rates. The removal of tax deductibility of mortgage interest has compounded their challenges, and the focus on tenant rights adds to the mix. There's a potential scenario where some of these landlords might exit the market once it stabilizes, which could amplify demand pressures and lead to further rent increases.
Interestingly, in response to the housing shortage, businesses in Marlborough are acquiring rental properties to accommodate new employees, transients, and even existing staff, providing an alternative solution to the housing crunch.
Sale and Purchase Landscape
Marlborough's real estate market is undergoing some intriguing shifts. While the number of property listings is historically low, there's a surge in listing inquiries. Many homeowners are biding their time, waiting for spring and post-elections to make decisions about listing their properties. Open homes are experiencing decent footfalls. First-time homebuyers constitute around 30% of the market, alongside about 20% "new" and less experienced investors. This is driving demand at the lower end of the market. At the same time, the upper end of the market remains active. In the mid-value range, where demand isn't as high, there are opportunities to acquire well-established properties at reasonable prices.
Migration patterns are also under scrutiny, with net migration at approximately 30,000 annually. Interestingly, there's evidence that individuals who were once city dwellers are now moving to more affordable regional centres, seeking reduced mortgage pressure, easier commutes, and improved quality of life.
Locally, the port development and combined school projects are anticipated to introduce around 1,800 construction-related employees to the region. This adds to the 1,000 employees that other major industries in Marlborough are also looking to hire in the coming years. This potential influx of residents may further strain the rental and property markets in Marlborough.
Outlook and Recommendations
Overall, there's a sense that property prices are approaching the bottom of the cycle, with hints of slight increases within certain price ranges in Marlborough. Considering these dynamics, investing in property maintenance and repairs is paramount. Proven time and again, preventive maintenance and early repairs are more cost-effective than addressing issues retroactively. Regularly planned renovations help properties stay modern, visually appealing, and functional. Additionally, maintaining insulation and ventilation keeps operating costs low, benefiting homeowners both in their daily lives and when it comes time to sell.
Stay informed, stay proactive, and don't hesitate to reach out for expert guidance as you navigate the evolving Marlborough property landscape.
Information provided here is collated from several sources including recognised economists, local property agents etc. Thoughts and opinions are not necessarily mine alone and are not meant as financial or investment advice.