NZ Property - June Market Comment

NZ Property - June Market Comment  by Gavin Hamilton

June Market Comment

I think it’s fair to say that June was not the best of months for Real Estate. The ASB economist is calling the market weak and predicting drops in values, the ANZ economic specialist sees a steady as she goes scenario and the latest Barfoot figures show a stalled market although one following the basically established seasonal trends.

In fact they are talking of different markets, some national, some regional and some city markets, and considering Real Estate generally is a neighbourhood market most of the evaluations become suspect. It is very true that we are all subject to the same national circumstances, interest rates and insecurities it is also true that our Eastern Beaches moves in a different way to Herne Bay, Parnell, Papatoetoe and Henderson.
It is also true that suburbs will be affected differently by the Budget announcements and the variations to the tax laws.

There is a big risk in uncritical acceptance of data, opinions of experts; it’s easy to be led astray and to make mistakes. One weekend headline had houses (nationwide I suppose) to fall by 12%! Further reading specified that it was a fall from the peak prices of ’07 and further that a large part of the 12% was accounted for as a result of inflation! If you just read the headline you would be mislead. The combination of factors will probably result in little change.

Even in a specific market, property behaves differently. You will struggle to find the genuine bargain buy everyone is searching for at a price under $600,000; available homes are in short supply and sell well. The expensive homes continue to attract good results if presentation is impeccable and again there is a short supply of such property.

Just to demonstrate the pattern the market nationally follows I have included a graph of the property listed and sold over a year. Worth noting that activity is highest in spring and summer (after Xmas) and falls away in winter. A commonly understood truth. What is also evident is that the sales follow the listings, more listings- more sales. A reason lot of potential vendors give for holding listings back until spring is the increase that occurs at that time.

When you look at the graph what is also evident is that in winter the listings fall away more than the sales indicating much less competition for listings with a relatively higher number of buyers available for new property. The increased opportunity and competition at that time is one of the few chances for a premium available.

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by Gavin Hamilton - Branch Manager
Star Real Estate Ltd - Professionals in Howick
Licensed Real Estate Agent