In setting up this blog I chose a statement that I felt would provide a “guiding principle” for the blog: – that statement is presented in the header of the blog
Topical, informative and relevant comments and stories related to the real estate industry that hopefully will inform and provoke debate and comment
What I did not want to do was take a political stand or endeavour to be seen as a guru or forecaster in this industry, I just want to be an information source and a point of contact on matters related to the real estate industry. Now as is so often pointed out the real estate industry relies on 3 key components (i) willing buyers (ii) willing sellers (iii) a capacity to pay the price for the property – pretty simple and for most of my life the only variables at play have been the balance between (i) and (ii) – is it sometimes a buyers market, sometimes a sellers market.
Well at this time we seem to be very close to a major issue with (iii) which has nothing to do with individuals, but everything to do with credit upon which we have all become so accustomed – we are in a credit crisis – as yet a way out of this crisis has not been found or at least demonstrated. A lot is being done to try and avoid this credit crisis becoming an economic crisis.
Now I do not have answers or wish to express an opinion of what should be done here in NZ or globally, but I consider that people (NZ property owners, aspiring property owners, anyone reading this blog) would be better off being well informed. So with this in mind I would encourage people to read this opinion piece blog post by Bernard Hickey titled “How a catastrophic collapse scenario might play out” which he wrote late on Friday 3rd October, after what was for him a period of quiet reflection. The article is valuable, but like all blogs the richness is as much a reflection of the comments that have followed the article.
I would welcome any thoughts or comments on this blog or his, you may hold an opposing view and to hear that would be of value, after all discussion is good, information is good, the broader the communication of such information is in everyone’s interest.
I believe this is a very relevant topic in our times. The issue of having a willing seller and willing buyer have always been seen as the key in any transaction. Now the issue of the “capacity to pay the price for the property” – I recently had a case where we had 3 conditional contracts fall (for the one property), all because of the inability to obtain finance. The buyers were trying to borrow too much for the banks liking – not just a single bank, but three lenders made independant decisions and decided not to approve finance. The successful purchaser (the 4th contract) was a chap who had already sold and therefore in a much better position being a cash buyer.
Mark
Thanks for that feedback – practical examples that speak to these scenarios always add weight to the issue. It is certainly a challenging market – however one in which I would suggest that professional real estate agents can provide a valuable and much needed service.