Kiwis hate to loose
Kiwis Hate To Loose
No matter how much economists dwell on the fact that our housing stock is overvalued, or that the value to income ratio for residential property makes us one of the least affordable countries in the OECD, their ranting has little to no effect on rising property prices. The reason for this is that on the whole New Zealanders are unwilling to accept losses on their most prized assets. In my experience if the market isn’t right most vendors will put their lives on hold weathering as much pain as possible in a bid to hold onto their property. Despite wanting to sell this holding pattern will continue even in the face of increasing mortgage rates until they see signs of improvement. Unlike the US, we can’t just post the keys back to the bank when being a home owner proves too hard and the stigma of a mortgagee sale prevents us from walking away. Most of the forced sales post the GFC were due to changes in circumstances for over stretched property speculators and a few as a direct result of the business downturn where the family home had been used as security. So like it or not, housing prices are not likely to take a significant dive any time soon.
The Wellington Market
We are hitting that low point in the year with fewer listings and the average days on the market starting to stretch out. Although the volume of sales has dropped, prices have remained steady. At present it would appear that ‘no price’ marketing campaigns like Tender and Auction are not creating the results seen at the start of this year with buyers shying away from obviously competitive situations. As a vendor coming to the market it is important to ensure correct pricing is used from the start of the campaign. As a buyer don’t be misled by some of the information coming through. If you think that prices are going to drop you will more than likely miss out in the process, the good thing is that this market allows you to buy well in less competitive situations. Don’t be the buyers that missed the market post 2008 expecting some landslide in prices; they are still looking to secure that elusive bargain!