Sellers will have an added expense with GST payable on agent’s commissions, but looking at the big picture it’s not really a significant amount. Remember too the  reduction in personal tax is likely to make many home owners better off.

Despite the gloom it’s important to remember that houses are still selling, buyers are still buying and life is still going on. There will always be genuine reasons why people need to sell. The most common are the 3D’s : death, divorce and da bank. And people need to upsize, downsize, or transfer out of town. And there are people still looking for investment property too. There will always be opportunities for buyers and sellers to make lifestyle or wealth gains. You just need to keep an eye on the bigger picture, instead of retrenching, reacting negatively and shrinking to the current reality. Remember, fortune favours the bold!

You just got the phone call from the real estate agent letting you know that your offer on the house you have your heart set on has been accepted. You paid the GV (Government Valuation, or  RV – Rating Valuation). Did you:

A      Pay too much?

B      Pay a fair price?

C      Got it for a steal?

So, what is the correct answer?

Actually, it could be any of the above, depending on many factors. Firstly, how recent was the RV? If it was older than 12 months, the likelihood of it being relevant slips away quickly. Markets change. Banks recognise this and when they require a Registered Valuation for security purposes  they usually want it be not more than 3 months old.

The condition of the property has a huge impact on its market value. Improvements to property are only captured in the Rating Valuations if they require resource consents or building consents. Rating Valuations don’t necessarily  capture landscape gardening (you could easily spend $60,000 plus here). Nor do they  take into account new kitchens, bathrooms, interior and exterior painting, or new carpets.You could easily improve a property by spending over $100,000 and it still wouldn’t be reflected in the Rating Valuation.

Then there is the motivation of the seller. If they needed a sale and were keen to take the money, then maybe they settled for a lower end of the fair market range. Or maybe they weren’t in a hurry to sell and you had to pay what they wanted in order to get it (usually a dream price).

Really, it’s hard to say if the GV was an accurate market value or not. But most buyers know this. They know what is fair market value. They know what is over priced and they know what’s a steal. And they know (deep down) that GV doesn’t usually have a lot to do with market value.

It’s not about GV. It’s all about the competition. Sellers have competition and so do buyers. When a house is for sale, it is never sold in isolation. It is in competition with other houses for sale. And buyers only pay what they have to pay  in order to get the property  and no more (usually more than the other buyer) .

That’s how the market works.

Mmmmmmm. now that’s food for thought …

Unlike a new factory or processing plant, Ryman’s end product creates new housing opportunities which means all those people who will buy a retirement villa at Ryman’s centre will end up selling their existing homes and so a chain reaction begins.

This will have an impact on future market  prices. Gisborne’s population is static and has been so for many years. So if there is not an influx of new people coming to Gisborne, there will be a strong supply of houses for sale in Gisborne but not an increase in demand. The law of economics of how market prices are driven in part by the supply and demand, will come into play and we may see a further easing of prices. But if on the other hand the projected population growth for the region kicks in, then Ryman’s new centre may be the answer for a projected shortfall in housing stock. It will be interesting to see it all unfolds.

Either way Ryman’s new retirement village is a welcome project for the region.

a leaky home - a nightmare

When making the decision about purchasing the right home, it is not unreasonable to be concerned if the property is a leaky home or not. In Gisborne the chances of it being a leaky home are low. The Weathertightness Homes Reolution Service (WHRS) has only had one of the 4,000 property cases from Gisborne. No doubt there have been more cases of new homes requiring the builder to go back and fix the odd problem, but the leaky homes saga goes way beyond that. Back in the 1990′s some methods of constructing residential homes changed. Problems did not start appearing until many years later. Now they are all too apparent. Watch the video leaky homes in Gisborne about how Gisborne has been affected by leaky homes. Also visit the website houses for sale in Gisborne for more articles about leaky homes in Gisborne.

So, are we likely to see the growth in the Gisborne residential property market again in the near future? If the rest of the country is any indication, I think so. After all, while we may be a little isolated, we certainly aren’t isolated like the Chatham Islands. Now that must be an interesting market…

As we head into summer, things are picking up.  More properties are coming into the market and with excellent buying opportunities, now is a great time to make a move. Take a look at the four year comparisons as shown in graph form.