Well it seems that the buyers are out in force again 🙂 The last few weeks have seen a rather increased volume of buyers enter the market. Most of the buyers I talk to have said to me they have been looking for ages but only just come back into the market going to open homes in the last couple of weeks. And it is these people who are actually snapping up the buys out there. These buyers have been watching the market and have seen the progressive levelling out over the winter period. But it looks like that these buyers have started to get out there and pounce on what they see as a good buy now.
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This trend is fairly typical but the downside that we are experiencing at the moment is there is very few new homes coming to the market. It has almost got to the stage in New Plymouth where we have got very few “good houses” left out there. The sudden influx of buyers to the market has caught us all by surprise and created a void in stock levels.
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I specialise in the Westown area of New Plymouth and do quite in depth analysis of the listings and sales in the area. Last month in July there were 24 sales in the area. At the start of the month there were 31 houses on the market, of these there was as far as I know 2 properties withdrawn and over July only 5 new properties went on the market in Westown. So in a perfect world at the end of July there were only 10 houses left on the market in this location. Now that is a huge drop in supply in the area for buyers to look at. And a huge opportunity lost from the 10 remaining properties that probably didn’t have the price right.
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At the time of writing this there have been a further 6 sales in Westown with 4 properties added to the market. Three of the properties that come on this month only spent a week on the market. So at the time of writing there are only 8 properties on the market in Westown that are “For Sale. Not a lot really.
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I don’t know about the rest of New Plymouth exactly but just glimpsing at the open home grid and the amount of advertising that is going on and the very very few listings that all the real estate companies I have spoken to have got over the last 4 weeks the I think the supply of homes has more than halved. I will confirm this for July Market stats when I finish doing them.
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This opens a great opportunity for new homes coming to the market. If you price your property right and have it presented well to the market and have the correct exposure to the market I think you will definitely sell your home in a good time frame. If you look at the stats you can see the sales are there and the buyers are buying. If you are looking at selling, I need more listings. Most of mine are now sold. 🙂 But more seriously if you are thinking of selling, it isn’t a bad time at all to come to the market in New Plymouth and maybe the rest of the country.
I just posted this on Bernard Hickeys interest.co.nz site:
Bernard – I don’t want to upset you mate but with regard to house prices I think you might be comically pessimistic and you contradict yourself with regard to interest rates in this Mexican standoff post with your post “Investor demand driving interest rates lower”.
There are too many factors that will arrest the housing slump in NZ before it gets much worse.
I do not think many people will agree with you that we will plumb the depths of the USA or UK market – sure they may be one year ahead of us but you have posted three other items today that tend to indicate that this will be a very short sharp recession that CPI figures may turn negative, commodity prices and exchange rate come down etc, etc and in addition there will not be enough new home construction over the next three years to keep up with natural population growth, let alone any migration surge that may be encouraged by an exchange rate slump.
There are more factors out there right now that are starting to look positive for the housing market than those that may be negative.
The “wait and see” buyers are now getting very, very nervous and it’s only a matter of time before the factors move so far in their favour that they will simply not be able to resist securing a home. Many have just come off the fence are more are certain to follow.
Why wouldn’t you buy if interest rates get back into the sub 8% range, your wages go up, your taxes come down and/or you can now re-patriate your overseas funds and receive more Kiwi $’s. To add power to the argument – yes you can now buy a home for 10% or even 15% less than it would have achieved at the peak.
I’m a real estate agent, you’re a journalist, a market just happens, nobody controls it – it will happen regardless, that’s why it’s called a market.
What hope have you or I got of calling the performance of the housing market from now until 2018 when your latest posts indicate that economists, central bankers, governments etc have called it wrong on the world economy in general.
Suddenly as quickly as everything turned to crap it now looks like there is light at the end of the tunnel and the tunnel appears to be a very short one.
Your right there Ross. I agree with you 100% on the point you raise about been pessimistic.
I also agree with you when you talk about the market is not contoled by anybody and that it will just happen but I must expand on that a little and say that I believe to a certain degree (one of the many points you talk about) markets are a small part controlled by what the people that seem to be in the loop and that are perceived to know what is going on in the market they are commenting on.
With the oil market the increase there is perceived to have been driven by the speculators. Now with our housing market which is far more transparent the words of these so called experts has an impact I believe in the confidence on the buyers and sellers. But unfortunately us being humans we usually add more weight to a negative and take it more seriously than a positive. So this does have an impact but I believe that the housing market is quite transparent and the more so it becomes the easier it will be to make informed decisions no matter what the market. Giving more stable confidence to the real estate industry as a whole.
But where you talk about Bernard predicting whats going to happen right up to 2018. Well I disagree with people doing that. It encaptulates the imagination but it is in a way reckless to fire out general statements like that.
Ross, Correct me if I am wrong but isn’t the market in your neck of the woods going reasonably well with buyer strength. If you run out of listings it must be. Its just a matter of giving sellers confidence to let them know that they can sell and buy without any major loss on their part. Its very complex. We are all in the same boat. The bottom line is there is no need to be pessimistic but a great need to be realistic.
But Ross everything is in proportion. And I will say that the media has a lot to answer to in terms of confidence with everything. I am not sure if the media can actually put a positive spin on anything. And You can tell that Bernard has that media background with his take on everything.
Actually there were many headlines that were all ultra postive when the boom was on, in fact probably perpetuated the boom even longer. They were as positive as they are now negative – one I remember was on the front page of the Herald ” Home owners ride the $500 per day rocket” which referred to house prices going up $500 per day. All that did was give the rocket a turbo boost!
Your right. The media need something to talk about don’t they and property and politics are of good conversations and debate. One thing you could agree on is that the media does influence the way we look toward things.
I echo what you are both saying for my market in Wellington’s Northern Suburbs. Stock levels are at an all time low, our usually full Property press is feeling like a Women’s magazine with no celebrities starving themselves or rugby players getting into trouble for the week.
The web hits are high on all of the sites we have properties on and our open homes are being generally well patronised. I believe that there is a bit of a ground swell of demand growing but buyers, especially the timid first home buyers, need some positive signals from the sensationalist media reporting sector.
Now is a GREAT time to buy, and there has been movement in our market by some investor groups. I was recently accosted at an open home by no less than 8 people in one buying group who had been scouting all the potential investment bargains in the area. Never mind the fact that they put in an offer at half the advertised price with a 15 day “cover all” due diligence clause (thanks Richmastery!).
Watch in the next month or so as interest rates fall further, spring weather lifts peoples spirits, and the electioneering steps up a few notches. The election goodie bag is full this time around and it is sure to spread some positivity to overcome the over hyped pessimism that has pervaded winter in New Zealand.
I have a few investors that I work closely with. One has just bought 3 million dollars of rental properties in New Plymouth. She has told me she is not worried on the market here in New Plymouth. You can buy rentals here that will produce a high yield and get them in the right area you cant go wrong.
I like how you have bought up the election in this. I dont know how you feel but I think this years election is going to be huge for this country. I don’t personally think Labour have done a bad job at all controlling the economy in the context to whats happening globally.
But I think they might be doomed no matter what they do from here. People get sick of the same old same old and blame the government for any problems. Time for a bit of a rark up and National may just come out of this one on top. Will be an intersting and hard to place election this year.
well just to go on from this, it is now almost the end of the week and we have huge numbers of buyers looking and putting contracts on the properties. and no properties coming in. buyers are actually paying more than usual to secure the very little stock out there at the moment.