What Does a 'Buyers Market' Mean for Me?

The term ‘Buyer’s Market’ is being used quite a bit in the media right now. 

Let’s cover definitions quickly, so we can get straight to what it means for you if you’re looking to sell or buy a property. 

There are 3 types of markets:

• Buyer’s Markets favour buyers more – buyers have more bargaining power

• Seller’s Markets favour sellers – sellers have more bargaining power

• Balanced Markets see a fairly even balance of bargaining power between sellers and buyers.

Now, don’t get caught up in sensationalised reports or doom and gloom click bait - AKA the media.  Buyers are buying houses and sellers are selling them, so what does it actually mean?

Firstly, it means more houses are on the market and there’s more choice for buyers:

Market stats for Wellington fresh out yesterday show:

• New listings up 69% in April, compared to April 23

• The amount of stock on the market was up 19.4% in April, compared to April 2023

Now, this doesn’t mean that houses aren’t selling, BUT it does mean more competition between sellers:

• 269 properties were sold in Wellington City in March, and 308 were sold in February.  April figures are not yet out but they will show houses being sold. 

And it generally means that properties are taking longer to sell:

• The median days to sell in Wellington in March was 36 days, versus the 10 year average for March of 33 days (NZ Property Report – 16 April 24, REINZ).

And usually it means house price growth is low - being either negative, small positive or flat:

• Wellington house prices fell by -1.0% in March and by -1.2% for the 3 months to March, but were up +4.7% for the year to March (REINZ House Price Index Report – 16 April 24)

The real issue in market conditions is getting a handle on the ‘extent’ or ‘degree’ involved for the market type:

The best measure to gauge this is ‘Market Inventory’ vs ‘Long Term Average’.

A measure of market demand versus supply, this measures the number of weeks it would take to clear all the stock currently on the market at the current rate of sale:

• When inventory is well below long term average you’re talking a strong seller’s market

• When inventory is well above long term average you’re talking a strong buyer’s market

Wellington in April had 13 weeks of inventory on market, compared to a long term average of 15 weeks (REINZ – NZ Property Report), so not extreme in either direction right now, though the coalface suggests it’s leaning toward buyers, as stats can be a tad behind by the time they’re released. 

For a Buyer’s Market, The Following Things Can Really Help Sellers and Buyers

Let’s deal with selling first:

The best time to sell is when you’re ready!

Unless it’s November 2021 of-course in which case the best time, armed with a crystal ball or time machine, is November 2021!  Jokes aside though, it comes down to having a plan and being ready for your important move.  There’s no sense putting life off so when that’s the case it’s time.  Houses are always selling…sometimes it’s just easier or quicker than others…but they are selling. 

Pick much Stronger Representatives than you think you’ll need – forget fee, talk experience and service

• It’s no longer 2021 or 2015 to 2018 for that matter.  In a buyer’s market avoid low fee low capability agents like the plague - the market won’t be doing the heavy lifting for sellers like it did back then and it punishes the latter.  It’s vital you choose much stronger experience and skills in your agent representative in THIS market than you might have done before – they’ll know what to do and how and when to do it to chart you safely through the conditions for a result you can be pleased with. 

• The opposite is clear when you see it – crap photos, wrong pitch, low numbers, no reports, no changes, no progress, low communication, no or low sale and much stress – but when you’re seeing it it’s really too late!

You’re Competing with other sellers whether you realise it or not

• You must have a plan to have your property on point and put the work in to present it well and make the best impression – get expert advice and follow the guidance.

• Don’t undercook the marketing investment because an agent who wants your business presents a smaller marketing cost – remember the competing bit!!  You need more of the right people through the door and you want every potential buyer who might like your property and want to make an offer to be there.

Doing The Same Things and Expecting A Different Result

• You must work with agents that are constantly monitoring and changing the approach to keep your campaign dynamic.  Houses are taking longer to sell and they get sold by doing the right things at the right time.  Plot spoiler…the ones selling are doing this.

• Selling at any time has the potential to be a bit nerve-wrecking, but it doesn’t need to be – make sure the service you choose has frequent communication and support, including written market feedback reports so you can see for yourself what the market response and feedback is on your property and what might need to be changed to get to sold. 

Now What About Buying?

• Still Need to Be Competitive for Good Property – Even in the poorest markets, well presented properties in good locations are still desirable and get sold.  Be careful not to be caught up in media click-bait.  Instead, look at the actual recent sales and go in competitive for what you want.  The right home doesn’t come up every day and funnily enough when it does, someone else often wants it too!

• Create Buying Criteria And Avoid the Never-Ending Open Home Loop - more choice is great but without clear buying criteria you’ll be at everything and everyday!  Work out a list of ‘needs/must-haves’ versus ‘wants/desirable features’.  Focus on the first list when setting up your viewings for a laser focus and best use of your time. 

• Look for Property Versatility – your needs can change and having some versatility in how you can use or enjoy a property already built into the property is a win.  Examples are extra spaces (think working from home – a more recent trend), spaces that can be partitioned or re-configured, garages that can be converted, land areas that allow for adding small out buildings (e.g. like sleepouts), and layouts that can accommodate visitors or paying guests etc where needed. 

• Don’t Get Stuck On What You Can Simply Change – carpets, curtains, colours, fittings…it’s all changeable.  What you can’t change is the location, what direction it’s pointing to sun-wise, and the amount of land it’s got.  Get those factors right and be open minded on the other stuff.  The saying ‘worst house in best street’ is a mantra for a reason! Serious equity can be built up by being prepared to renovate.

We hope this has given you a few useful thoughts for the months ahead.  If selling or buying is important for you, a chat and advice is the best next step.  Reach out for a trusted updated opinion of value on your property or for a chat about the market and preparations for your specific situation (leonie.snook@harcourts.co.nz 027 518 0008).