Home Buyers…..Just keep this in mind
Wasn’t hard to see this past Sunday, was it. If it wasn’t the Sunday Times headline, then it was someone reporting on it.
Have you noticed that the time the high tide arrives in your area can be hours different from somewhere only a short while away? How things don’t all happen in the one place at the same time?
Well, guess what, Real Estate is no different. Just like the ebb and flow of the tide, because everyone in NZ is being told now is a good time to buy….be aware that automatically doesn’t apply equally to every region in the whole country.
Just like early 2000’s when a influx of immigrants combined with a return to bricks & mortar (Vs shares) also happened to coincide with a “seachange” movement in Kiwiland.
I don’t think the next upturn in this seemingly never ending cycle will be any different. Those places most popular will notice the increased interest first, and it will flow on from there. As an example look at the DAYS TO SELL chart above. (full sized one here)
Quite obviously you’ll notice how Nelson roared ahead late 2001 into late 2003. Keep an eye on the NZ median on the chart too. Then our region went off the boil while, ostensibly some other regions of NZ caught up. (aka “rode the ripple”)
Anecdotally then, those other Southern regions of the South Island who had harboured a desire to live / retire to the place they had visited for summer holidays for the last 15 years, found Nelson was now with-in their price reach.
In other words, if you sold your 3 bedroom home on a 800m2 section in a southern provincial town, and wanted to move to Nelson, you were no longer looking at only being able to just afford a 2 bedroom flat. Courtesy of the increased prices being paid for southern homes though 2005-2007 a home owner could now afford to look north.
All I’m saying is don’t think that because the headline on the TV or frontpage of the newspaper is telling you NOW its ok to buy, that applies to everywhere in NZ. By the time you see that headline for some areas of the country its probably too late to get a bargain.
April 14 2009 08:21 pm | Nelson
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Bevan Dixon on 15 Apr 2009 at 1:43 pm #
Well written David, so very true.
Bevan Dixon
Commercial
Peter Driscoll on 15 Apr 2009 at 2:30 pm #
David that is a really clever post backed up with data – I loved it. The media has a 2 edge sword and conflicting headlines disturbs everyone in reality, especially when trust is at a premium with what happened to the finance companies. I very much like your style – cheers
andy h on 15 Apr 2009 at 10:33 pm #
David
A little bird told me that your commercial property people (Summit) haven’t completed a deal in nearly 4 months. Is that true?
It would not surprise me – the vast amount of commercial property that is empty in the Nelson area tells us everything we need to know about the state of the local economy.
Also – any comment on rentals? This piece from the local paper shows rents being slashed, and certainly the number of properties for rent has soared in the past 2 months:
http://www.stuff.co.nz/nelson-mail/news/2317967/Rents-cut-to-meet-market
I reckon the limited pool of buyers is practically exhausted now – and they have have left more than a few rental properties empty by the look of things…
Bevan Dixon on 16 Apr 2009 at 10:32 am #
In reply to andy h,
I am a Commercial Agent with Summit Commercial, I have completed a number of sales and leases in the past four months, and have several more to go unconditional with in the next few weeks, yes the market is a little slower than 18 x months ago but still business is being done, in fact its busier than it has been for many months.
David L on 16 Apr 2009 at 11:25 am #
In a marked difference to Residential Real Estate Agents, Commercial Agents tend to keep all things under the radar. I suppose it comes mainly from that vendor “my business is for sale to the right person but don’t want it public knowledge that its for sale” request. However in regards to your question I can offer you a big No, that is not true, in fact far from it, some commercial agents were in our top 10 performers this last few months, and thats on both a freehold and a lease basis.
Although up til the start of this year, rental properties were holding up to unseasonally high weekly asking rates, it would appear over the last 4-8 weeks that scene has changed.
There is much in the media about “accidental landlords” and from what I see and hear there are some locally too. Two bedroom properties don’t appear to be suffering as much as the 4-5 bedroom, and executive homes.
The pool of buyers has still been active over the last two weeks, though in so saying, seasonally, that is different than the norm for the pre/during/post Easter period. How long it will last, how long is a piece of string?
andy h on 16 Apr 2009 at 12:38 pm #
Bevan – interesting; yet a casual glance around Nelson (and indeed a perusal of the press) suggests a vast number of buildings/businesses for sale/for lease. Two examples – downtown Rutherford Street (one of our busiest streets) has 4 commercial properties for lease within maybe 100m of each other (2 have been vacant for 6 months plus) – our main shopping street (Trafalgar) has 3 shop premises for lease within 50 meters of each other. I’ve lived in Nelson a long time and frankly these sort of vacancies haven’t been on the radar for a very, very long time. What this is telling us about the local economy should be obvious – and thats BEFORE the effects of the large job losses at Sealord and Nelson Pine kick in (and as the recession in tourism only now starts to get going).
Perhaps Bevan you could tell us how many businesses you have for sale/for lease now as compared to 18 months ago……..
Bevan Dixon on 16 Apr 2009 at 9:28 pm #
Hi there andy h,I have fewer business s for sale now than I have ever had, it appears business owners are simply working their business to the best of their ability as it is believed there may be fewer buyers out there, and or the actual price that may be achieved in this market if taken to the market and sold could be lower than in previous markets.
Buildings for lease, yes there are many more available currently than has been the case,this isnt all due to the economic situation, its also due to the fact that there has been a number of new buildings that have been built in the past ‘two odd years’resulting in some of the more mature warehouses etc have tendered to be left with out tenants, I believe while the rents are adjusted to take into account for there age, needing a little r and m, also what the incoming tenant will spend as opposed to the landlord this is all around securing a mutual lease for both landlord and tenant.