Archive for March, 2015

Compare Mt Eden to Feilding

I was looking at houses for sale in Mt Eden, Auckland, and found a nicely renovated 1920’s early bungalow of 130m2 floor area with 3 bedrooms, a bathroom and en suite, and double carport. The land is very small at approximately 340m2, and there is a nice deck. Mt Eden is a popular suburb. The Heading is “The Price Is Startling,” indicating that it is likely to get snapped up quickly.

I have hypothetically appraised the same property in a good Feilding locality at $250,000 – $275,000.

What are they asking in Mt Eden? I firstly note that this property sold for $470,000 in 2010, and $670,000 in February 2014.

The current startlingly low asking price is only $975,000!

You can buy 3 to 4 properties in Feilding for the price of one similar one in Mt Eden, Auckland!

Kind regards
Michael Ford

Confidence

We see it with sport. How good is a confident player or team, compared with one that lacks belief.

The real estate market runs on confidence too. We have seen it in a major way in Auckland over the last few years.

The Feilding and Manawatu market has a lot more confidence around value that many of our regional neighbours, but not at the level of our largest city, which is fuelled by immigration. Feilding has modest population growth which underpins confidence.

All the work that has been done to improve the attractiveness of Feilding to reside and do business in over the last 21 years has assisted property values. We see neighbouring towns and cities that used to have values the same as Feilding, now with values of $70,000 – $100,000 below those of Feilding.

Keep up the good work, Feilding Promotion!

Kind regards
Michael Ford

February Better

Both Feilding and Palmerston North enjoyed a better month of sales volume through all Real Estate Agents in February after a slow December/January.

Feilding and Palmerston North are doing ok in holding their values, and I expect to see a gradual increase, but I do worry about our regional neighbours. The median in Levin and Wanganui used to be much the same as in Feilding! It shows what happens when you have a declining population. Thank goodness for Feilding Promotion!

Median house prices calculated over 3 months:

Feilding                 239,000    Palmerston North        292,000
New Zealand        436,000    Eastern Suburbs Ak   1,175,000
Levin                     173,500     Rangitikei                       160,000
Pahiatua                144,000    Wanganui                       155,000

Kind regards
Michael Ford

Beware of Asking Price Statistics

I am very wary of real estate statistics based on asking prices. As we all know, you can ask whatever price you want, but a sale will only take place when a willing seller reaches agreement with a willing buyer. This is virtually the definition of current market value. An asking price might be ridiculously high and distort the stats.

Asking prices are usually high in a bullish market such as in Auckland currently, and some sellers get lucky. In a more static market such as ours currently, sellers are going to miss opportunities of a good fair sale if they have a high asking price. The average margin between asking prices and sale prices would therefore be different in a bull market and a bear market.

How do these “Asking Price Statisticians” deal with auctions, tenders, offers over, buyer enquiry ranges etc etc?

I heard a DJ on a reputable radio station say this week that the residential real estate boom is not just happening in Auckland and Christchurch. It is happening right throughout New Zealand. This is simply not true, and will misinform the public. He was basing his comment on “Asking Price Statistics!”

Kind regards
Michael Ford