If it doesn’t cost you anything it normally means somehow you are what’s for sale. It could be your personal details, your buying preferences, or, in the property market it is likely to be your ‘free’ online market assessment. In New Zealand there are several portals which now offer those, including: Homes, Property Insights (Trade Me) and One Roof. Traffic to these sites is significant, and large volumes of traffic means big advertising dollars.
Who’s right or who’s wrong
When assessing ‘values’ across the three platforms, there can be a significant range. Depending on whether you’re a buyer or a seller, you are likely to put different weight on these values. Naturally, a vendor is likely to favour the highest value. But buyers will see the property at a lower value, at least until such time as they come along and view it. Then the emotions take over!
At the time of writing this 72 Fraser Ave, Johnsonville had the following ‘values’:
- One Roof $915,000 to $1,240,000 estimate $1,075,000
- Property Insights $800,000 to $1,100,000 estimate $950,00
- Homes $1,010,000 to $1,160,000 estimate $1,080,00
As you can see, all three sites appear to use different algorithms which have produced a different range of different answers. The actual sale price was $1,400,000 so it would appear they all missed the mark.
Where we are running into trouble at the moment is when the online estimates are pitched too high. It is on a daily basis that we are talking to active buyers who have decided not to view property based on the online assessment. In particular, it’s the ‘Homes’ value which seems to be a popular starting point.
There’s an old saying in Real Estate: ‘Pitch it high and watch it die, pitch it low and watch it grow’.
A high ‘Homes’ value has the ability to derail your campaign. So, make sure if you’re looking to sell, you assess your online estimates in line with your real estate agents’ range. If they are misaligned, we highly recommend changing that before your campaign goes live.
In the race to be king of the free market assessments, ‘Homes’ has well and truly secured that position. A few years back when the site launched I had a discussion with the head of Trade Me Property and mentioned that they posed a threat to their position. The response? They didn’t stand a chance. Fast forward to 2021 and Trade Me is now the majority owner of the Homes website. This has created an incredibly powerful online property portal, and one that required Commerce Commission approval. I wonder if it might come back to bite them?
Where to from here?
The American property market operates quite differently from ours and is certainly not all you see on Bravo’s ‘Million Dollar Listing’. Some of you may be familiar with the concept of ‘iBuyer’ (instant buyer) property portals who make sight unseen cash offers on property. These offers are generated by an algorithm which considers a range of factors. These factors include current average days on market and recent sales in the area. There are a range of benefits to the owner including an unconditional offer, no upfront or post sale repairs, avoiding agent interviews and of course, no open homes! The property is then prepped properly and on-sold for a profit. But despite the general dislike of real estate agents, could we ever bring ourselves to sell our homes to a computer? It is likely to be far below market value, but only time will tell.
The Wellington Market
The market has had a sluggish start to spring with significantly fewer buyers looking to purchase. The long term viewing average numbers are still good, but they are in stark contrast to what we were seeing just six short months ago.
Interest rate rises are going to play an important part in prices over the next 12 months, with cost of borrowing on the up, and loan to income ratios coming in with full force. The good thing about the Wellington market is that it holds its ground well, although history doesn’t give the same confidence to the regions and outlying suburbs. Too early to say Christmas is coming?
Wellington market quick stats
What’s on this November in Wellington?
Pink Ribbon Walk 2021, 13 Nov, Frank Kitts Park, Jervois Quay, Wellington
The Pink Ribbon Walk celebrate survivors, remember those that we have lost, raises awareness and much-needed funds to work towards Breast Cancer Foundation NZ’s vision of zero deaths from breast cancer.
Whānau Mārama: New Zealand International Film Festival, 4-21 Nov, Various Locations Wellington
Starting off at The Embassy Theatre with Dame Jane Campion’s eagerly awaited Power of the Dog, the 50th Jubilee edition of the festival lets film fanatics delve into new worlds created by talented filmmakers.
Wonderland Glow Show, 22 Nov, Shed 6 Queens Wharf
Following a number of sold out events, The Glow Show team are back with the Wonderland Glow Show. The giant scale puppet masters are known for telling familiar and intriguing tales through magical glow in the dark characters. The new 2021 show is a special New Zealand interpretation of Alice in Wonderland.