Properties with un-consented building work, complete do-ups and houses with structural problems will be the hardest to sell this year – and cause headaches for both the seller and the listing agent.
With an abundance of properties for sale in many regions, buyers will have the pick of the crop. Agents believe buyers will be looking for homes that require very little work, if at all, have all the paperwork up-to-date and are ready to show.
Harcourts Glenfield agent David Ding says the homes more likely to fly off the shelf this year will be ones that are completely done up to a high standard.
“If you gave me a fully renovated home, you would make my job much easier. But I fully appreciate and understand it’s impossible to find a perfect tradesperson to do a good job at a certain period of time.”
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Failing a major renovation, making sure the home is tidy and well-presented will also help.
Rather than homeowners shelling out $70,000 to replace the kitchen, Ding said the seller could just spend a few thousand dollars and make a few changes such as replacing the bench top, spray painting the cupboards and switching the handles to make the home more appealing.
“It’s all about effort this year,” he says.
Houses with unconsented construction, title issues or in poor condition will struggle to sell this year. Photo / Getty Images
With lending tight, buyers are also struggling to borrow for renovations which is why people are favouring buying a house that’s already been done, he said.
“What I find the most challenging to sell is the property has not been tidied up or presented well.”
Older houses with larger sections over 600sqm that previously attracted developers and ex-rentals that have had nothing done to them could struggle to sell unless priced realistically.
In Wellington, Tommy’s real estate agent Jason Lange agrees that houses with larger 1500sqm-plus sections won’t get much interest until later this year or early 2024 when developers are ready to buy again.
Instead, well-presented, fully or mainly renovated family homes with three bedrooms and a study or four bedrooms in sought-after suburbs such as Hataitai, Island Bay, Mount Victoria and parts of Berhampore will be more of a breeze to sell as people are still looking to trade up.
“Big-ticket items such as roofing, foundation work and removing walls – that sort of thing – people are certainly trying to shy away from at the moment, but [are] happy to do that cosmetic stuff where ... the walls need to repainted, potentially floor sanded or new carpet being put down – quite happy to put that down.”
However, a property needing lots of work could find itself a buyer, Lange adds, if priced well.
Harcourts agent Zani Polson says do-ups in the lower end of the Christchurch market are still selling because some people are realising it’s all they can afford.
“Those parties who just don’t have the funds to buy something that is completely renovated, they’ve gone, ‘ok what can I buy?’ and have said, ‘I will buy this and at some point in time I will have to do the renovation myself or have a little bit of funds put aside in order to do that’.”
The houses that will sell more quickly will have the least amount of headache and be priced realistically, she says.
“They will have all their paperwork in play – LIM, title all that sort of stuff. But equally they will have all the documents – if there have been renovations, they will be the ones that have the paperwork to support that. They will be the ones that [buyers] will be confident on and people will move forward on.”
Properties with unconsented spaces will find it much harder to get traction.
“If buyers are OK with it that’s fine, but the banks will run scared or the lawyers will say there’s a better buy out there for you, you don’t need to take on this headache," she says.
Bayleys Christchurch general manager of sales Rachel Dovey says having a clean and tidy property will help it sell, but homeowners should stop short at taking out walls to provide additional space because this could result in the property not complying with council regulations and actually make it harder to sell.
However, regardless of the property, most agents agree the price of the property will be key to it selling this year so vendors need to be realistic and accept that unless they’ve purchased in the last two years, they won’t be losing money.
CoreLogic NZ property economist Kelvin Davidson agrees, saying that what people can pay for a property depends largely on the rising interest rates and whether the banks will let them.
“A big challenge for people wanting to buy is getting a mortgage and getting a mortgage they can actually afford in terms of interest rates.”
