Even though it’s really only the beginning of the winter, I always look forward to the shortest day of the year. I secretly love the anticipation that the days are getting longer. First by a few seconds a day and then gradually increasing so that by mid-summer the days will be lengthening by around 2.5 minutes per day. Just like the real estate market it starts slow and then accelerates.
And just like the days prices are rising in Whangarei. It’s no longer a rumour! It’s a happening thing. The June Core Logic figures (QV) show a 3.9% property price rise in Whangarei over the last 12 months. Take out the distortion in that prices only started to rise in October then we are looking at an annual rise of over 5%. This is almost certain to be exceeded as just like after the winter solstice, the rate of growth will accelerate at a rising tempo, as the buyers outstrip the supply. Tauranga has moved from 5.1% price increase in April to 6.75% and Hamilton has moved from 3.2% to 4.1% over the same two months. So the ripple effects from Auckland is hitting the provinces now.
In April the residential growth rate in Whangarei was 2.3 %, two months later its 3.9%. My best guess is that the growth rate will hit 7-8 % by Christmas, unless the reserve bank steps in, and that is looking increasingly unlikely as most informed observers are predicting interest rates to go lower rather than higher. If you have been holding off buying, for whatever reason, you need to get in a buy now. If you are holding off selling for any reason hold off for a bit longer.
There is now a noticeable shortage of properties available for sale and agents are struggling to find properties to sell. A sure sign that the listing supply is drying up is sold signs on Main Road properties. These are always the hardest and slowest to sell but are selling now. Hikurangi is also a market indicator and sells well in a rising market but struggles in a quiet market. It’s selling very well now.
Aucklanders are like Yellow Kiwi Fruit. Much more popular than the green ones and very welcome in our fair city because they come loaded with juicy capital and bring diversity, talent and employment with them. Some research that has just come out of Realestate.co is that when Aucklanders are looking to get out of their overcrowded city the biggest growth areas for searchers are
- Hawkes Bay 152% growth (The actual price growth is only 1.3% in Napier so it has not affected prices as yet.)
- Manawatu / Wanganui 123% growth
- Waikato 113% growth
- Northland 85% growth
- Bay of Plenty 83% growth
It all proves the point that if it weren’t for all the money, Auckland would be a desolate wasteland of empty houses looking for owners.
Asian Invasion. Another interesting bit of research from the same site is that interest from Asian investors has dropped 20% while interest from our more traditional overseas investors has risen by 20% . (US, Australia and Great Briton). It may signal the end of the Asian fascination with New Zealand real estate which will have a big impact on the Auckland housing market.
Rentals. I received a lot of positive feedback about the last newsletter which focussed on rental investments and trends. I will follow up this research in about 6-8 months. Talking to the rental manager she reminded me the importance of insulation. With winter upon us they are getting tenants moving out of the colder uninsulated homes. It’s obviously going to become a standard requirement in the modern rental home and you should factor it into any rental investments you currently own or are thinking about buying. She also commented on the demand for the better quality homes. With many people securing a future retirement home while prices are cheap, but not planning to move into them for a few years, the company has had a lot of quality homes to rent until the owners retire. They have been surprised at just how many quality tenants there are for these homes and would like more properties. Call Mel Lindsay on 021 347355 for more information.
Marketing! Its time for a radical change. Those that have used my services know that I have almost entirely moved away from newspapers as a marketing tool. They are expensive and becoming ineffective in terms of reaching buyers. The local property Guide has a circulation of around 20,000. Both Trademe and Real Estate.co have a monthly, real estate only, viewing platform in the millions. Even Harcourt’s own site which is the largest of the Real Estate owned sites has over 180,000 unique visitors a month . Taking the difference in price out of the equation it makes no sense to continue to throw money into print media when the internet has become the most effective way to promote property.
The last three properties I have sold have all sold for full asking price and none have been in the paper. One of the difficulties with the paper is the delay in getting the property to market. The deadlines the paper requires means we, as agents, have to have our advertising ready for print fully eight days before the Property Guide comes out . So if the property is a good one the internet users know the property is on the market 6-7 days before the newspaper readers do and by the time the readers enquire, the property is under offer. An interesting statistic I saw a few years ago was that the average age of a real Estate agent was 57. The average age of a buyer was 39. I’m a couple of years older than the average agent but in my defence I am very immature.
Signage. This also has become a marketing method of the past. Because people will often make a decision whether to look at a property based on a sign and the information on that sign, I now believe it better to start the marketing without one. That way people are making a more informed decision to look based on the fuller detailed information and multiple photos available on the net.
Help please! Because I market via the internet and not the papers and because I use signage sparingly, my profile in town has dropped. If you open the property guide you would think I had retired or died, neither of which is true. So if you do know anyone who is looking to sell please give them my name or give me a call. I rely almost entirely on referrals and repeat business. I get lots of valuable help from so many of you, and am very grateful for this. Before you feel too sorry for me and decide to personally help out by kicking the kids out and selling your own home, I am still doing well and have managed to retain the Harcourt’s Whangarei top residential salesperson award for the second year running.
Auckland does it alone! Knight Frank has just published a list of countries that have the fastest and lowest housing growth rates in the world. Hong Kong tops the list with 18.7% annual growth. Turkey is next with 18.6% and then Ireland third with 16.8%. Auckland, sorry I mean NZ, come in at 6th with 9.5% growth. Australia dawdles in at 14th with 6.8% just ahead of South Africa at 6.7%. On the other side of the coin the Ukraine is the worst performing with -15.5%. Greece is 6th with -6.1%. Singapore is surprisingly low (8th) at -3.3% and Japan continues to show no sign of moving out of the deflationary zone with -0.7% in 9th place.
Three surprizes for me. I would have thought Hong Kong had some risk of being swamped by China and not in a good way. Ireland is obviously doing better than expected as it was one of the “in trouble” economies during the global financial crisis. Greece on the verge of financial collapse has only lost 6.1%. Shows what drinking a lot of “Ouzo “does to the mind.
The Wolf in the Mind. I have just finished reading “Scott Guy “the storey written from his parents perspective about his murder and the subsequent trial of their Son in Law Ewen McDonald . It’s a worthwhile read in its own right, but there is a concept right at the beginning that I have been incubating. It’s based on an American Indian concept that we have two wolves in our mind. One is full of anger, bitterness, malice, worry and all the things we don’t like in our lives. The other exhibits love and forgiveness and caring and all the things we do like in our lives. These two wolves are moral and spiritual opposites and are locked in an epic battle to stay dominant and control our thinking and feelings. “Which wolf reigns supreme in this perpetual tussle?