This Week in Property - Crystal Balls are Out of Stock People!

Recent years of unpredictably and sensationalised media in the property market has some still caught up in past drama… trying to pick market ‘peaks’ and ‘troughs’ or expecting ‘the big win’ instead of the market price for their property.

Here’s a recap of where we’ve been, where we are now, and how you can go forward with your plans.

4-year Roller Coaster

The last four years has been a roller coaster, with big ups then downs:

1. First, Prices Soaring Unexpectedly - when the pandemic arrived most pundits said the economy and property market would crash. But the market did the opposite, thanks to the government stimulus injection and related policies. In Wellington, property prices shot up just under 28% over 2021..OMG! Hand rubbing excitement for those selling at peak in November 2021 and getting a windfall. Not so much for late 2021 buyers, later feeling they overpaid.

2. Next, Prices Free-Falling Back to Earth – after peaking the market spent 18 months falling (READ correcting) backwards. The stimulus induced romp was over and house price falls every month was reality.

3. Then, Stable and Flat - we now have a relatively stable market which on prices is flat, not growing or falling to any great degree. Nationally, house prices fell by 0.2% in the 3 months to end of May 2024 down slightly on a 0.1% fall for the 3 months to end of April 2024.

Crystal Balls Are Out of Stock

None of the above was forecast with reasonable accuracy or in the case of pandemic, which was unprecedented, with no clue at all.

Outside of external shocks, the property market is underpinned by economic fundamentals – e.g. population growth, incomes, employment, wage growth, interest rates, construction etc – and changes in these affect its trajectory as they affect property demand or supply. The market moves through up and down cycle phases over years and around a trend.

For those seeing the property market like most of us looked at the $50 million powerball draw last week, rushing out and getting a life changing ticket, this is a mistake as trying to pick timing to gamble a windfall is near impossible.

You know you’re at the market ‘peak’ or ‘trough’ when you are almost there or just afterwards which isn’t much use…a little like most of us clutching our powerball tickets when the 8pm Saturday night future arrived.

Life Stage Changes

What matters most isn’t the market cycle. For most of us our property buying and selling is done to move to or through important ‘life stages’ or to achieve ‘life goals’.

The cost of not making the change is of-course another year of putting off the lifestyle benefits you’re expecting to get, whether it be retirement, a fresh start or getting a family home. For most of us, any property we own will be owned or have been owned for quite a number of years so the ups and downs don’t matter so much.

And as anyone who has someone in their circle who isn’t well knows only too well…time is the scarcest of all of our resources and you just don’t get that back. So, when you are ready for the lifestyle move, don’t put ‘life’ off. Push go!

The Magical Buyer

Now, here’s the secret…property success is not really a gamble at all.

What it’s saying is that if you’re being realistic in the market, and your asking price reflects market pricing, then if you are marketing and presenting your property properly the buyer will appear for you and you will sell.

Real Life ‘Now’ Example

Despite the media doom and gloom (which gets clicks) sellers and buyers are transacting and getting on with their lives.

A client seller getting on with their lifestyle plans set an asking price two weeks ago, informed by market sales and market feedback.

In the first week after advertising their asking prices, they had 11 groups through and a good offer. In the second week they had 14 buyer groups through and another good offer and they sold.

Over the two weeks, buyers were asked about whether the asking price was right, too high or too low and they kept saying the same thing - it looks fair for the property. They also said it more with their physical response - 25 buyer groups through in two weeks and two offers in what the media and water cooler chatter feels is a subdued market. And when other competing properties were seeing less interest.

This result reflects buyers who are trying to get on with their important lifestyle goals visiting a property to buy a home (25 of them in 2 weeks and 2 offers), and realistic sellers also wanting to get on with their goals. The result? A sale at a good price in the market and two parties excitedly getting on with their lives.

Getting Unstuck

Or they’re clutching the powerball ticket, being their dream premium or hope windfall price, rather than the realistic price that will have them sold and on with their plans.

The last two times everyone agrees were great to sell at were late 2015 and late 2021. They were not accurately predicted and were 6 years apart! Now there are definitely things you can do to sell more quickly and for more but these are not hope strategies to cross fingers and wait for a boom. Rather they are know-how actions (e.g. how to prepare a property well) to do better than average.

Our advice… don’t put your life on hold for the unpredictable and unexpected windfall as who knows when it will come and it will be years away. Instead push go and don’t look back. Your next exciting change is just a phone call away.

Trusted Advice

A good result that allows you to go to the next stage is achievable in the market at any time. For advice or to chat about the best ways to get your property and plans ready drop us an email or call (leonie.snook@harcourts.co.nz or 027 518 0008).