Homeowners opting to renovate existing properties instead of buying

The growing trend of homeowners choosing to ‘do-up’ instead of sell-to-buy is impacting the country’s housing market.

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Auckland is up nearly 27 percent while Wellington now has a median price of $855,000. Source: 1 NEWS

Fresh Real Estate Institute of New Zealand data shows our housing stocks are at their second lowest since recording began.

Last month there were fewer than 15,000 properties for sale, compared to more than 20,000 the same time last year.

Homeowners opting to renovate and hold on to their current plots is playing a part in the lack of supply.

Wellington-based renovations company Bright Build Ltd told 1 NEWS it has seen a surge in demand.

“People are trying to utilise their space better, so the removal of hallways and dead spaces, and a number of people number of people looking to turn their internal garages into becoming a home space so it can provide another office or a bedroom, and a bathroom,” said co-owner Jenny Taylor.

Source: Seven Sharp

She clients often want to stay in the areas they have already bought in and leaving some locked out of sizing up in the same suburb as house prices continue to soar.

“There are so few properties available and there is no guarantee one will come up that is right for you and your family [once you’ve sold]. And if you wait, in that period the price may have escalated by $100,000 or $150,000.

“People are trying to stay put and make the most of what they’ve got and be a bit more inventive about how they tackle these housing issues.”

REINZ spokesperson Dee Crooks told 1 NEWS homeowners are anxious in the current market.

“We’ve got FOMO, so fear of missing out, and also FONFA, fear of not finding anything. If you’re selling your house you don’t want to sell and have nowhere to move in four weeks' time. You want to make sure that you’ve purchased before you sell, and then that just creates a vicious cycle,” she said.

ANZ chief economist Sharon Zollner believes renovation rate rises are also due to the borders being closed.

“People do have a bit of spare cash,” she said, also revealing the bank has a steady demand for renovation loans.

“Interest rates are of course extremely low at the moment so the debt servicing cost is quite reasonable so of course with a renovation you don't have to try to scrape together some ridiculously high deposit you do for a new home. so it is a little bit more accessible for many.”

The lack of houses on the market is pushing our already high prices further up.

The median house price in New Zealand is now around $830,000 – an almost 30 per cent increase in 12 months.

The price is not a record breaker, but the percentage increase is the highest New Zealand’s seen in a year.

“That’s placing a lot of pressure on affordability, especially for first home buyers,” Crooks said.

REINZ data released today shows the median price in Auckland is now $1.148million, with Waitakere City now sitting at $1 million and Papakura District $900,000.

In Wellington, the median price has risen 30 per cent to $885,000, and houses in the Gisborne region are up nearly 50 per cent, with a median price of $620,000.