My advice remains similar to that in my previous market update. With the increasing number of buyers coming back to the market as set out above, now can be a good time to get ahead of the traditional summer selling season and list your property (but only if you choose the best real estate salesperson for yourself).
We are expecting house prices to remain stable in the next couple of years at least (aka revert to the 10-year average growth). First home buyers are still out in force, and we have seen borrowing capacity increasing generally to around the $1 millon mark.
This means great buying opportunities if you are now looking to UPGRADE – either in terms of location (better school zones), size (2/3 bedroom homes to larger homes) or amenities (new pool etc) given the smaller trade-up premium (which I’ve previously covered extensively). In short, the trade-up premium is the difference you will pay to upgrade to another home. This premium has been shrinking in the past few months as a result of the slow-down in sales (and sale prices) of higher-priced properties, making such properties more ‘accessible’ to upgraders.
If you are thinking of DOWNSIZING or moving out of Auckland, you may be wondering whether it’s worth it to put your property on the market now. Here are 3 points you should consider:
When selling your property, you need to remember that competition is key. Remember, when your home goes on the market, it does not go in isolation. It is always in competition from neighbouring similar properties. Right now, the market is lacking stock, especially well-presented homes.
If your house is fantastic for a first-home buyer, then you stand a fantastic chance if you have the right marketing. My listing at 422 Ellerslie-Panmure Highway experienced fantastic buyer traffic – 135 groups through, over 13K+ TradeMe views, over 20 repeated viewings, 5 building inspections, 9 registered bidders, 50 over bids and 1 spectacular price. So when an agent tells you that the market is slow, consider if it’s the market or the marketing.
If your house is on the higher-end of town, then be prepared to wait longer for a good offer, provided that your real estate agent has a fantastic marketing strategy in his/her sleeves. In this market, marketing is becoming more and more critical in ensuring a successful sale and the skills of real estate agents in this space matter.
If you are thinking of developing, or wanting to sell to a developer for a high price (learn why CV can be an unreliable guide), then just be aware that development finance is hard to come by these days. Developers have reduced appetite to be developing (and construction companies are going bust).
Many vendors have put their properties on the market, only to pull them off if they didn’t get the prices that they wanted and then plan to put them on again next year. There’s absolutely no guarantee that the market will be better then (if anyone is giving such a guarantee, then I’ve got a bridge to sell to you). But your life still needs to go on, and how long would you need to postpone retirement for? That being said, we are not expecting a market crash next year barring any major financial disaster, although (as mentioned earlier) downside risks persist in global economic conditions.
If you really want to make use of that extra year, I would suggest reviewing the previous marketing campaign and think about what went wrong or could have been done better. Look at the feedback from buyers and see if there’s anything that you can do to address them (for e.g. simple touch ups or renovations), provided the cost is not overly prohibitive.
The definition of insanity is doing the same thing over and over again and expecting a different result – Albert Einstein
The current market is unfortunately not the market that rewards loyalty to any particular agent or company – certainly not if you want to achieve your goals. (This is also why I work towards earning the trust of my clients each and every time, regardless of the length/nature of the relationship.)
If your agent is clearly under-performing in that previous campaign, reviewing that relationship and changing the agency can make a world of difference. You owe it to your family and yourself to pick the best real estate agent.
Buyers are SCARCE in this market and the ‘fear of missing out’ (FOMO) is gone. A lot of effort needs to be going into nurturing existing buyers to become interested in your home.
What does this mean for you? Your real estate agent needs to be working harder and be a dealmaker (not an order-taker). Attributes such as being able to speak their language (to understand their objections and react accordingly), strong negotiating skills, tenacity etc become extremely important. We’ve all been to open homes in which the agent(s) just couldn’t care less. This is not what you should be expecting of your real estate agent that is selling your home in this current market.
I’ve previously covered in detail the factors going into your decision as to whether you should sell or buy first in the current market, along with this key trick.
And if you are thinking that you can take the extra year to renovate or do up the property, that can be a fantastic idea. But be really careful about overcapitalising.