Tag Archives: Property Market

238 ‘as is’ sales and counting

Pictured: 22 Titirangi Crescent - sold for a record 'as is' price in Tumara Park

Pictured: 22 Titirangi Crescent – sold for a record ‘as is’ price in Tumara Park

Celebrating our 238th ‘as is, where is’ sale is both rewarding and humbling, especially for a market that we didn’t originally set out to become specialists in. I have full respect for my team who have worked hard in a focused effort to help create the systems we have now, and the results simply speak for themselves. Of the 239 that we have listed 238 have sold! From the collation of property info packs both online and in hard copy to pre-drafting the sale and purchase agreement with appropriate clauses that protect both vendor and purchaser my team’s work ethic is nothing short of phenomenal.

Team Griff’s 99.6% success rate for ‘as is, where is’ sales
Such results are a direct reflection on our knowledge, expertise and systems. It may seem strange, but I am quite passionate about the process and the great thing about it is that process is very transparent. Post-quake and numerous scopes later, we have become “professional report” rich – great info to be able to prove the actual damage of a property.
Beware of the opportunists off the street or on the radio
With opportunity comes opportunists, and having heard some of their sales pitches, they are quite persuasive. The problem being their reality of value is based on both their perception only and in many cases, they pitch that conservatively to line their own pocket. Integrity is vital post-quake, especially so when people are vulnerable, some ground down by the process of fighting both EQC and their insurer for years. I recently met a gentleman who had been at it for more than six years – needless to say, he was at the end of his tether.

Marketing expertise
Effective marketing will bring you multiple parties and fair competition, a much more transparent way of establishing true market value.

1528 as is where is buyers as the click of a button
Team Griff have built up a strong following of ‘as is, where is’ buyers – as easy to unsubscribe as subscribe, our database has proved invaluable for both purchaser and vendor. With our first port of call being e-notifying 1500 plus as is buyers, vendors can be assured that their property is being marketed to those most likely to respond, let alone the phone calls we can make if the going gets tough.

The proven value of the auction process
Without question the auction process achieves better results for most properties. The reality is that it is very seldom that we don’t have multiple interest in an ‘as is’ property and auction is the best and fairest way of dealing with competition. There are more times than not where we get a better selling price than expected and with just one property last year that didn’t sell under the hammer, it is no wonder most sellers rejoice over an unconditional result that is on their terms.

The listings keep coming
While the ‘as is, where is’ numbers have eased a little over recent months there are still a lot coming through the system, so expect more of the same and be sure to keep in touch for the heads up on that new listing before it hits the market. Here’s to many more win/wins for sellers and buyers – both parties securing upside!

 

Griff’s New Year update

Griff NY UpdateRefreshed and sun-tanned
Long summer days, sun-kissed skin, BBQs and falling petrol prices – the perfect ingredients for a classic Kiwi holiday! Most of us (apart from the farmers) have relished these great summer conditions – some saying “this brings back memories of how summer used to be…”

Market vibe
Returning to five new listings, another two prior to the weekend plus the phone ringing and emails pinging means business as usual – the real estate market poised for more of the same. Both potential sellers and prospective purchasers are already actively seeking real estate resolve with typical new fervour.

Griff’s predictions
Following strong capital growth throughout 2015 combined with the Canterbury regions rebuild phase forging ahead it is my professional opinion that the local economy will remain in good heart for some time yet. On the real estate front it is likely that the demand will remain strong, however it is evident that we are seeing more competition, especially so with spec homes in newly establishing subdivisions.

This naturally has a flow on effect throughout the greater market place, while this is likely to bring some tempering on increasing market value, capital growth rates are most likely set to remain on the positive side of the ledger. For those selling, this will mean greater emphasis is needed on quality marketing, effective pricing and attention to detail with regard to presentation. All in all, I believe we can look forward to another active year of real estate trading and steady growth.

Capital growth rates and days to sell
The latest stats for from the real estate institute highlights that capital growth in Christchurch has remained flat over the last two months of 2014 with the median sale price remaining unchanged at $420,000. This equates to an annual capital growth rate for 2014 of 9.16% (REINZ verified). The list to sell period for Christchurch has remained pretty steady throughout 2014, tracking between an average 25 to 30 day period with December’s figures showing 29 days to sell.

Catch the momentum
This new year market provides opportunity for both buyer and seller alike – new and refreshed buyers entering the market place plus fresh stock being launched daily. Today is always the best day to transact real estate! Remember Griff.net.nz for all things real estate.

Take care and talk soon on the street…

Canterbury market catches its breath

Changing cityscape: a newly constructed office/retail building at the Victoria-Montreal-Salisbury intersection in central Christchurch. Photo from www.christchurchdailyphoto.com

Changing cityscape: a newly constructed office/retail building at the Victoria-Montreal-Salisbury intersection in central Christchurch. Photo from www.christchurchdailyphoto.com

One does need to be a rocket scientist (and I’m certainly not one!) to appreciate that Canterbury has and will continue to have a flush economy for some time yet. A citywide rebuild underpinned by a $40+ billion price tag makes reasonably simple economics.

Driven by the key components of the above, combined with positive net migration and an overall citywide housing shortage, it is my opinion that the local real estate market will generally remain in good health over the short to medium term, even with the prospect of rising interest rates.

That aside, it is inevitable that even within such buoyant times there will be periods of hesitation and flatness for whatever reason. Sometimes the market simply needs to “catch a breath” – right now is one of those moments. Here at Harcourts Gold we run a weekly focus meeting that is attended by between 35-40 high performing salespeople. Meeting and rubbing shoulders with those who live and breathe the vibe of the market is invaluable and allows us to analyse, strategize and tweak our approach.

It has been noted that enquiry levels over recent weeks have softened, numbers attending open homes have dropped off and generally the marketplace is more tempered. The bottom line for home owners is that there may not be multiple interested parties jostling for their home and prices paid may be a little more conservative than those of the rampant market that we have become accustomed to/taken for granted.

Some food for thought and just wanting to keep you abreast of what’s happening out there.

Enjoy your week and may the new financial year provide for you more exciting opportunities and challenges…

A dissenting view on LVR restrictions

Reserve Bank governor Graeme Wheeler has indicated that he wants LVR restrictions as a way to shore up stability and take the heat out of the housing market.

Reserve Bank governor Graeme Wheeler has indicated that he wants LVR restrictions as a way to shore up stability and take the heat out of the housing market.

A guest post by my son, Caleb:

The proposed move by the Reserve Bank to curb low-deposit lending has received a fair amount of attention in the national media. In previous speeches, Prime Minister John Key has called for an exemption for first-home buyers. However, as Brian Fallow states, because first-home buyers represent about 30 per cent of new mortgage lending, with probably a significant chunk of that being on deposits of less than 20 per cent of the value of the property, such an exemption would undermine the effectiveness of the policy. Fallow continues:

… in a speech to Local Government New Zealand’s conference yesterday Key contented himself with saying that “first-home buyers are a priority for the Government”.

He moved swiftly on to acknowledge that for the Reserve Bank its plans to regulate high loan-to-value-ratio (LVR) lending are primarily about protecting the stability of the financial system and averting the consequences, apparent in recent years in several Northern Hemisphere countries, of a property bubble bursting.

Now I can understand part of the rationale for the policy embarked upon by the Reserve Bank. It’s undesirable for banks to be making high-risk, low-deposit loans to home buyers where there it there is a risk that a downturn in the housing market could result in a number of people being saddled with debts that far exceed the market value of their properties.

It is also an attempt by the Reserve Bank to an extent deflate the housing bubbles that are becoming increasingly apparent in Auckland and Christchurch. But I don’t think trying to dampen demand is the right way to go about the problem. What is needed is wide-ranging supply-side reform of the housing market. Metropolitan limits need to be extended, intensification allowed for in certain areas, and brownfield development opened up. Local and central governments must also examine options surrounding the granting of building consents, and bringing down the costs of construction. At the end of the day, this country needs more houses for its residents. An increase in the supply of homes will bring prices down in the long-run and lessen the need for high risk, low-deposit loans.

We must also ask whether low-deposit borrowing is really a significant problem that needs addressing. David Farrar at Kiwiblog provides some useful analysis of the data from the five major banks:

Farrar Graph

Farrar provides some analysis of the data above:

So the top three lines are all mortgages with LVRs below 80%.  They comprise four fifths of the total mortgages, and this was much the same in 2008.

There has been virtually zero growth in high LVR loans (over 90%) since 2008 despite there being solid growth in the housing mortgage market.

Essentially, of the approximate $185 billion of housing lending in NZ currently around $150 billion worth of it has an LVR of under 80%.

I think both the RBNZ are the Government somewhat over egging the problem and the need for LVRs.

We also have to be careful of the possibilities of unforeseen consequences. Restrictions on how much a bank can loan to home buyer may mean that they seek unsecured funding, rather than secured funding. This actually happened in Sweden, and actually works to decrease financial stability.

My father commented in his latest blog post:

Call me old school, conservative or irrelevant but I fully support the reining in of “high risk/low equity” lending. What was wrong with the old days when a minimum deposit of 20% was required? And yes we worked, scraped and saved to get it but somehow we used to do it.

My response is that we are now in a different age. This proposed policy is not merely a return to the “old days”. Yes, while back then 20 per cent deposits were the norm, housing was also considerably cheaper not only in nominal terms, but also relative to the median household income. Twenty per cent deposits aren’t so bad if the price of your property is relatively affordable. This graph from a paper presented at the Centre for Housing Research Aotearoa New Zealand displays how much property has become unaffordable since the “old days”:

RBNZ Graph

While the ratio has eased off since the housing boom of the mid-2000s, we are now seeing it move upwards yet again, largely driven by the Auckland and Christchurch markets. The New Zealand Herald also provides a handy infographic with the latest data.

The prospect of owning one’s own home is becoming ever more elusive for young New Zealanders. It’s my view that the proposed changes to LVRs by the Reserve Bank is a blunt instrument that seeks to correct market distortions primarily in Auckland and Christchurch, but will restrict access to credit for all home buyers, and will result in the door being firmly closed to those who might have otherwise aspired to getting on the property ladder. Clearly the Reserve Bank is using this policy to attempt to take some heat out of the housing market without raising interest rates, which would otherwise negatively impact exporters with an appreciating dollar. Should this policy be implemented – and it’s looking increasingly likely that it will be the case – it will certainly be interesting to see whether it has its intended effect.

Caleb has works with Griff as a marketing and administration assistant. He has recently completed his LLB/BA (Political Science) at Canterbury University. 

Government Land Moves Welcomed

From the New Zealand Herald:

The house-building sector has welcomed the Government’s moves to solve the housing affordability crisis, saying it could be a big boost to the multibillion-dollar industry.

Philip King, Fletcher Building’s investor relations manager, said freeing up land was the key.

“Any moves that will facilitate greater land availability for new housing construction, particularly in the Auckland region, are welcome,” King said.

The Government announced yesterday that it would put a six-month time limit on councils processing consents for medium-sized projects, including housing developments, as part of a range of measures to make homes affordable.

While it does appear that there is no ‘quick fix’ for housing affordability at least the government is tackling the issue and taking some positive steps in the right direction.

Personally, I think it will be interesting see how things pan out here in Canterbury with large quantities of sections coming on stream over coming months. It is predicted that around 20,000 sections will be freed into the local Canterbury market. Now that is a lot of land and literally new communities!

While it is difficult to predict the actual effect that this will have on both land and building costs I do question whether demand will actually be as high as what is expected. I guess the big question is just how many of the earthquake displaced have already purchased? From experience I have found a lot of the post quake purchasers have gone and bought existing homes once cashed up with their insures. I think the jury is still out on this one – will we see a building boom or will we have a glut of land, I guess time will tell?