Is: ‘the land of the long grey cloud’ a more fitting name for our country, as we find ourselves in a recession once again? While the word ‘recession’ carries plenty of negativity, there are always opportunities in a downturn. So, this month we look at how to find the positive in times of recession.
Just Get It Over With
As a child I spent plenty of time at the dental clinic. Nothing filled me with dread like a fellow student standing at the door and calling out my name. This was always (predictably) followed by a chorus of “ooooohhhhhhh” from the class. The dreaded walk to the murder house was the most torturous aspect of the experience because once you arrived you were greeted by a smiling face, a local anaesthetic, and a cotton ball butterfly. The point of my story is: the thought of a recession is the worst part of the recession. We all knew things weren’t great and now we’ve had it confirmed. The only way from here? Up! Yip a recession confirms we are at the bottom of the cycle. So, while it might be tough for some time, the next phase is growth.
More Resourceful
When times are good businesses pay little attention to budgets, team numbers increase, and the Friday drinks trolley starts rolling out the Bollinger. When times are down, budgets are trimmed, and businesses are forced to look at ways to be more resourceful. It’s not a good thing, or a bad thing, just a known response to a predictable economic cycle. And where people get resourceful, the sky’s the limit!
Airbnb’s journey began during the 2008 recession when the co-founders struggled to pay their rent. In a stroke of entrepreneurial genius, they decided to rent out air mattresses in their living room to the attendees of a design conference, and the idea planted the seed for Airbnb, which has since revolutionised the travel industry. Airbnb thrived because of the recession, by offering affordable accommodation options.
Get In Front Of The Curve
Those that are brave in recessions can make huge leaps and bounds in their economic and professional careers.
During the great depression a young Walt Disney came up with the concept of Mickey Mouse. Despite the economic downturn, Mickey became an instant sensation, providing a welcome distraction and joy during tough times. The success of Mickey laid the foundation for the Disney empire.
If by chance my last Barometer inspired you to turn your hand to Real Estate as a career, now is a great time. Having experienced the pre GFC boom I decided to exit the industry in 2006, only to make the strategic decision to return to the industry with Amanda in 2011. Our thinking? A slower market is the perfect time to hone your craft. Every agent is a hero in the good times and a great market builds compliancy. It takes a truly skilful agent to navigate the bad and it is times like these where those skills are developed. Building a great reputation in a slow market will put you in a good position to leverage the good.
Take Advantage of competitive rates
As the old saying goes: never waste a crisis.
If your employment is unaffected, there is certainly opportunity to leverage the current economic environment. Over the past few years, we’ve all been the victim of unreliable tradespeople and the skyrocketing cost of materials. Now the dust has settled, and forward bookings for the trades have dried up, it’s a great time to get on top of that deferred maintenance. You’ve all heard me talk about deferred maintenance and the affect it has on your property value, never has this been truer than now. So, if you’re looking to sell within the next couple of years, use the availability of trades, and the competitive nature of the market to your advantage.
Buy The Dip
Despite the feverish market of 2020 and 2021, when month after month record prices were set, it was not the best time to buy an investment property. Sadly, as the market tightens, and affordability decreases many investors are learning that costly lesson.
So, while it might feel a bit scary now, if you have ever had dreams of becoming a landlord, it is a good time to get serious. With stock levels at an eight-year high there has been some downwards pressure on pricing. Interest rates are currently relatively steady (dare I say dropping) and rents are stable. As the great Warren Buffett once said;
“Be fearful when others are greedy and be greedy when others are fearful.”
If you do take the plunge and secure mortgage finance for your purchase, great news! The banks are competing again. Make sure you shop around for competitive mortgage rates and if you haven’t been offered cash for your loan, bank with one that is. There is some excellent cash back on offer
The Wellington Market
As the weeks roll on it has become abundantly clear, market activity experienced in February has started to wane because of uncertainty surrounding public service cuts. Anecdotally I would say the market has dipped a little from last year. While stats are helpful what they can’t tell you is the level of the offers which have been presented and rejected on the properties which have been on the market for sixty days or more. Only when properties transact can we get a clear understanding of what is really happening out there.
All eyes will be on the budget this May. I suspect that they will say the books are slightly better thanks to their fiscal approach over the first six months of National’s term and that the cuts won’t have to be as deep as they thought. An old classic from the political play book.
Wellington Market Quick Stats
What’s on in Welly?
Wellington Saints – 2024 NZ NBL Season, TSB Arena, 31 March – 14 July 2024
With a record eight sell-out home games in 2023, dedicated fans can once again bring their own energy and spark. The Saints have 10 home games at TSB Arena this season.
The Saints roster has the foundation of a long and athletic team with the signings of import Lat Mayen and local Yuat Alok.
This season’s league features two changes. An extra team has been added alongside a rapid league. This was launched successfully in the women’s Tauihi Basketball Aotearoa 2023 season.
Click here to purchase your tickets
NZ International Comedy Festival, 3 May – 26 May 2024
Get ready to titter, to guffaw, to let loose with a belly laugh. The 31st NZ International Comedy Festival hits Wellington with three weeks of hilarity in May. A huge group of comedians gather from local shores and beyond to deliver a wild festival of humour. The city will be bursting with side-splitting live comedy delivered by dozens of comics.
Meet the Ben Stevens & the Team
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 happy to help.
