NZ 1st homebuyers are ScReWeD...

[fungus pudding]

I am with Dr Who! There are alot of cashed up buyers out there waiting for the right property (ie. quality properties in the right school zones etc) or Investors looking for cash-flow properties.

From my experience I have seen a huge influx of buyers at Open homes in the last few months. We recently listed our property at $769,000 and had 4 cash offers (between $740 - $755,000) in the first week of marketing.

I have attended 3 auctions in the last month,

1. Renovated house in Ilam, CV only $430,000 but sold under hammer for $900,000.

2. Renovated house in Bryndwr with CV $520,000 sold under hammer for $725,000.

3. 2 year old house in Prebbleton on 1 acre of land. CV $600,000, sold under hammer for $895,000.

Properties that have been on the market for awhile were probably overpriced to start with?

Interesting. But you are looking at one price bracket in one city. The overall story is quite different. Median prices are up - certainly, but that tells you very little. It's because first homes, the cheapies, are not selling. They are piling up.In which case the median price acts like the average price. So the only real test is what would each of the properties mentioned have sold for one year ago? More? Less? The same? It's only possible to summise, but a couple of simple irrefutable facts are that there are fewer buyers because of bank lending criteria. And the number of sales in the last 12 months has halved - a 50% drop. So the market has far fewer buyers overall - and far more listings. One thing you'll notice in most towns and cities, probably even in Ch-ch although I haven't looked for a while, is the ridiculously high level of adverising is around about half what it was. That's because agents are just not generating anywhere near the revenue they were. But look at the poms and the USA, drastic levels of mortgagee sales as properties revert to a more normal multiple of annual incomes. We lagged behind them on the way up - and will do so on the way down.

[minimoke]

volume is up but price is down......

Actually volumes are increasing as are prices. March was the second month in a row that saw price increases. And this is problematic for the Bernard Hickeys of this world. As the sale prices creep up it will take longer to swing around and drop to their predicted lows.

We may already have had our low of $325,000 in January 2009. For all the hand wringing that’s gone on that’s was just $5,000 down on Shrewdys price point of $330,000. But since then prices in 09 have increased to $335,000. Total March $ sales were the highest we’ve seen in 13 months and total number of properties in 16 months – so this suggests to me that buyer sentiment has changed – people are preparing to come back to the market. They are now more prepared to buy and they are prepared to pay a bit more – that’s not a sentiment consistent with a falling market – unless we are seeing a dead cat bounce.

[fungus pudding]

Actually volumes are increasing as are prices. March was the second month in a row that saw price increases. And this is problematic for the Bernard Hickeys of this world. As the sale prices creep up it will take longer to swing around and drop to their predicted lows.

We may already have had our low of $325,000 in January 2009. For all the hand wringing that’s gone on that’s was just $5,000 down on Shrewdys price point of $330,000. But since then prices in 09 have increased to $335,000. Total March $ sales were the highest we’ve seen in 13 months and total number of properties in 16 months – so this suggests to me that buyer sentiment has changed – people are preparing to come back to the market. They are now more prepared to buy and they are prepared to pay a bit more – that’s not a sentiment consistent with a falling market – unless we are seeing a dead cat bounce.

Of course the median price is up, but that means nothing. The thing that matters is whether the same property will sell for more or less than it would have previously, and that's difficult if not impossible to measure. But drop lower priced sales out of the equation and of course average and median will rise. Lower priced sales have contributed heavily to the drop in sales, simply because low equity buyers are no longer able to obtain mortgages. The overall number of sales is half what it was one year ago - a massive 50% drop in month to month numbers. That is a statistical fact. Don't believe the spin the Real Estate institute puts on ststistics by reporting selected information from their returns.

[The Great Gold Guru]

Hi , I am currently selling a rental property in Blenheim that we purchased in Dec 2007 ... so this is REAL data.

We paid : $380,000 current RV $350,000

Marketing started last Wednesday ...

6 private viewings
10 thru open home on Friday
15 thru open home yesterday

1 cash unconditional offer so far at $355,000 ... rejected

I will keep you all informed.

Funds required to help pay for purchase of new family home in Devonport.

[minimoke]

Don't believe the spin the Real Estate institute puts on ststistics by reporting selected information from their returns.

Strange how we can be discussing property but possibly comparing apples with oranges. I tend to go with REINZ data if for no other reason that it is freely available. It does of course have its limitations. Like they report median price of unconditional sales and that they only report transactions through a real estate agent. But what I can do is look at data over a very long time and their data tends to be quite timely (eg reporting March sales by mid April)– something I can’t do easily with QV.

QV also has its own limitations – they report averages and only get their data from councils once the sale has gone through from all sources – this means the data reflects settlement date which can be a few months behind buyer sentiment – which REINZ probably better reflects.

Regardless, the joy of statistics is we can each drag out what ever we like to support our position. But at least we can get hold of these stats which has to be a whole lot better than anecdotal information.

[lakedaemonian]

A bit of anecdotal info in our Christchurch beachside suburb.

For approx 8-9 months our two homes(old house sold, new home purchased) were the only transactions in our suburb(as best we can tell).

There's been the odd transaction since....but far higher than average number of listings.

Some homes have been listed well over a year.

We've even just had our first "3 homes for sale in a row".

Suddenly within the last 1+ month we're seeing "Sold!" signs everywhere.

Good news I'm sure for the vendors.

I'm still not changing my negative opinion on residential and commercial real estate one iota.

[minimoke]

Hi , I am currently selling a rental property in Blenheim that we purchased in Dec 2007 ... so this is REAL data.

We paid : $380,000 current RV $350,000

Marketing started last Wednesday ...

1 cash unconditional offer so far at $355,000 ... rejected

So you bought one month after the “peak” of the market. QV reckon the market has fallen 9.2% in the past year. It gets a bit confusing around March 08 since the market fell away a bit from Nov 07 before recovering a bit in March ’08. Shall we just round it out at 10% as what you should expect as a drop in value if we are to use QV as a guide. So this means any offer over $342K would be in line with QV press releases.

[Mick100]

Suddenly within the last 1+ month we're seeing "Sold!" signs everywhere.

.

I'm noticing the same thing where I live

[Financially dependant]

A bit of anecdotal info in our Christchurch beachside suburb.

For approx 8-9 months our two homes(old house sold, new home purchased) were the only transactions in our suburb(as best we can tell).

There's been the odd transaction since....but far higher than average number of listings.

Some homes have been listed well over a year.

We've even just had our first "3 homes for sale in a row".

Suddenly within the last 1+ month we're seeing "Sold!" signs everywhere.

Good news I'm sure for the vendors.

I'm still not changing my negative opinion on residential and commercial real estate one iota.

My feeling is that there is a lot of "selling into the rally", clear before winter starts to bite! Heading into the slower time of year and following overseas trends, there big drop was during winter!

[lakedaemonian]

My feeling is that there is a lot of "selling into the rally", clear before winter starts to bite! Heading into the slower time of year and following overseas trends, there big drop was during winter!

I would agree...I'm convinced we will see another leg down......but I'm unconvinced as to whether it will be a big one, a small one, or something in between.