Feeling the cool: Ben’s Barometer February 2017
Feeling the cool
The latest figures out from the major data companies have highlighted a nationwide cooling of the market. This is not news to us. Changes in the property market can come about very rapidly, and can brought about by as little as a minor policy change. We will normally feel this first at open homes. Numbers in attendance dwindle and this results in a reduction of offers and a return to consistency in the level of offers. These changes will not be as forthcoming for the statisticians who analyse markets based on transacted sales and may take upwards of three to six months to identify market shifts or trends.
A market slowdown doesn’t mean a reduction in value because the growth of the last eighteen months has already been factored in to your property’s market value. But it does indicate a change in the mindset of buyers who have once again started to notice deferred maintenance. This is something they have been willing to overlook in more recent, buoyant market conditions.
During an active market buyers are quick to dismiss the cost of a new roof, paint or repairs as the market quickly makes capital gains to off-set the expense. It is not until the market slows and the growth rates return to normal levels that buyers begin to view these as ‘costs’ and will either choose not to offer or discount their offer to factor in the work required.
My advice to anyone thinking about taking their property to market in the next 6-18 months would be would be to rectify any issues with the dwelling. This will ensure that by the time you are ready to launch the buyers have no reason to discount, thereby maintaining control of your assets’ appeal and sale price.
Are you wondering the best way to go about doing this? Engage a building inspector to provide you with a report on your property and then chat to your real estate agent about what things buyers view as important. Don’t be alarmed, no house is perfect, not even new builds, so every building inspector is likely to raise issues. Understanding which issues pose the problem to the market is the best way to form your plan of attack and set about making your property ‘market ready’.
If you would like a recommendation for a building inspector, or to discuss your report and market preparedness, we always happy to help. Please feel free to contact us anytime.
As mentioned the market has started to show signs of slowing. Writing this in the middle of January, it’s a little hard to see if this trend is going to continue or we might see a bounce in activity. As the weather has been pretty average in Wellington this would indicate that the market is likely to be slower to start as people struggle to complete pre-market preparation. In addition, interest rates are on the rise so this is likely to have some affect on price.
Wellington Market Quick Facts
Average sale price by area:
On February 6th it’s Waitangi Day. This month we thought we’d look into a few facts regarding this Nationally observed holiday, which marks the signing of what is considered to be New Zealand’s founding document.
Did you know?
- The Treaty of Waitangi was signed in 1840 by representatives of the British Crown and over 500 Maori chiefs
- It was officially commemorated in 1934, but has only been observed as a public holiday since 1974
- There were two versions of the Treaty signed; one in English and one in Maori. These were not exactly the same
- This has caused tension over the year, especially as past Governments have not always followed the Treaty agreements
- In 1840 there were thought to be about 80,000 Maori living in NZ, compared to approx. 2000 non-Maori
If you or anyone you know could benefit from a considered market assessment by Wellington’s only licensed agent and registered property valuer, please do not hesitate to call. We are always very happy to help.
Ben Stevens – BBS (Property Valuation)