I am indebted to QV for sharing the results of a recent survey they carried out with their customers on what they describe as the “State of the market“. These valuable insights seemed to have been lost in amongst the regular release of QV property value report for March 2009.
The most significant finding was that 53% of respondents “agree or strongly agree” with the statement that “Now is a good time to buy property”.
The survey also went on to examine respondents views on property price movements in the coming year. The majority (67%) believe that prices will fall with more than three quarters of these believing that the price fall will be in the order of single digit falls.
The information in this survey is interesting and reflects what we are now finding at the coal face. Job security is still a concern for some buyers and ranks more highly than interest rate movements or being able to secure finance in their decisions.
So 53% of people think it’s a good idea to buy a house in a declining market.
It’s true then, when real estate agents say “it’s always a good time to buy”, going up, going down, doesn’t matter.
Are people scared of being pricd out of the market again, with recent memories of the rapid rise of 04 – 05 – 06?
What can we learn from this? 53% think it’s a good time to buy (the other 47% of respondents don’t think it is a good time to buy–it would be interesting to know why). However, 67% think prices will continue to fall. So the majority of respondents should believe that buying tomorrow will be better than today. Crikey, that kind of sounds like a simple scenario for price deflation.
This reflects the sentiment I’ve experienced for the last 12 months. So many “lookers” say to me that they reckon the time to buy will be in 3 – 6 months. Augers well for a terrific increase in sales volumes in 3 – 6 months. Maybe, maybe not?
Steve, one of the basic ideas about deflation is why one purchase something today when it may be cheaper tomorrow. I very much doubt that you’ve experienced that for a persistently long period of time in your sales career. If you take a look at Japan, where deflation has persisted for over 10 years, you might be able to get some idea of how it all works. The Japanese are better psychologically equipped to deal with it. And the national savings rate enables them to soldier on. NZ’s fiscal position is pretty sick in comparison.
Thanks JC and I agree with your deflation comments. With prices back about 10% over the past year, myself and most agents have lived with ‘deflation sentiment’ almost daily. Luckily I deal with more people who “need” somewhere to live, rather than people who “want” somewhere to live. Regarding savings in NZ I’m absolutely with you. My parent’s generation wouldn’t dream of borrowing to buy a car. The current generation is lumbered with seemingly knowledgable Governments encouraging them to borrow (and banks to lend to them) to buy cars etc to “help keep the economy moving and keep people in jobs”. We need an economy based on production and savings, not debt and consumption. What should we do?