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Figures paint more positive picture than the hype

MEDIA RELEASE

Figures paint more positive picture than the hype

18 December 2007: While conceding the real estate market has “cooled”, the CEO of New Zealand’s largest real estate company, Harcourts, says the company’s latest statistics paint a more positive picture than the hype.

Commenting on the company’s latest figures, Harcourts CEO Bryan Thomson says price levels in most areas are remaining stable while the number of properties available for sale is still rising – which is good news for vendors and buyers respectively.

“The first half of the year was huge, with sales volumes and prices continuing to increase significantly. Admittedly in recent months sales volumes have cooled however the number of sales remain at solid levels in most markets and prices are holding, so it’s a more positive picture than many are painting,” he says.

“Despite negative rhetoric from key banking figures and many industry commentators, some better informed and without the personal agendas of others, the truth of the matter is simply that the market is entering a more stable phase, after a number of years of record activity.

“In early 2008 I expect the solid sales levels continuing in the urban real estate sector with active buyers in most markets, a strong employment market and rising incomes. However, price escalations are unlikely to be at the same rates we have experienced in the recent past. Further, people who paid a premium over the past 12 – 18 months and are now looking to sell will be disappointed if they expect to make a significant capital gain or in some cases to obtain a price equal to what they paid,” Mr Thomson says.

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“As for rural real estate, dairy farms and lifestyle properties in particular have been strong performers in the past year. With the dairy sector experiencing such good times, dairy units (including conversions), support properties and run-off blocks of land have all experienced increased demand, as have cropping and arable properties – helping push the rural median sale price to record levels.

Next year should see similar buoyancy in the rural market continuing, especially in dairying, Mr Thomson predicts.

“With forecasts of record milk solid payouts, dairy farms are set to continue to be hot property. Dairy farmers’ good fortune may also have flow-on effects if they decide to invest in other types of property,” he says.

“In terms of other rural economic units, their demand and value is likely to follow historical trends based on the returns available, while I believe the value of most lifestyle properties is likely to increase.”

As for coastal/waterfront property, Mr Thomson, says there is still strong demand for good quality coastal and waterfront properties.

“In some areas where there has been significant subdivision/development in recent years there is an oversupply of sections, however in general this segment of the market is looking good. With more family groups and syndicates in the coastal and waterfront market and a more liberal lending environment there is now achievable demand,” he says.

Mr Thomson says his advice to sellers is simple. “Select the best agency available, present and promote your property well and set a price that’s in line with the market and you will succeed.”

With buyers, his advice is to feel the fear and do it anyway! “The biggest risk for buyers is that they procrastinate and miss out on a great property. Investing in ‘bricks and mortar’ for the first time or upgrading is of course a big decision, but if you’re clear about what you want and you do your homework you shouldn’t be disappointed. If you procrastinate too long you will miss out.”

…ends

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