Recently, we celebrated our Harcourts end of financial year awards at the Wigram Airforce Museum. The breakfast function is to celebrate the success and hard work of the Harcourts salespeople in the Canterbury region over the previous 12 months.
Competition is strong, particularly as Harcourts market share in the greater Canterbury market is well in advance of 40%. In a New Zealand context Harcourts in Christchurch is seen as the bench mark against which all other markets compare. Twiss-Keir and Four Seasons provided some outstanding results and it is worth mentioning a few.
Harcourts NZ has been awarded a Reader’s Digest Quality Service Gold award in real estate sales.
The annual awards are decided via a robust survey by market research agency, Catalyst. Fifteen hundred respondents were asked to nominate a service provider in up to 41 categories, including real estate sales. To qualify to vote on a category, respondents must have used a service provider from that industry.
Harcourts CEO Chris Kennedy says winning the award is a great validation of the high value its sales consultants place on offering great service to clients, culminating in a great sales result, and of the hard work they do to achieve that.
“It is really satisfying to know the public recognise the expertise and high service offered by our team. “The Gold Quality Service Award sits nicely alongside the Reader’s Digest Most Trusted Award we’ve held since 2013.”
Readers Digest says it is confident that the results of this annual poll are the truly accurate measurement of New Zealand consumer sentiment in 2018. Survey respondents were asked to rank their experience on the listed companies according to these questions: Was an individual customer experience provided? Was a genuine insight into the customer's needs demonstrated? Was dealing with the company quick and easy? Was the customer's expectation met and, even better, exceeded?
REINZ have just released the latest sales data for our Christchurch market relating to February 2018. The results show some interesting aspects that, if taken out of context, could be misinterpreted. The raw figures indicate there were 554 residential sales in Christchurch in February 2018, $453,000 was the median sale value and 47 days was the average time it took each property to sell.
In comparison February 2017 sales statistics were 540 residential sales, $452,000 was the median sale value, with an average sale time of 37 days from list date to sale date. From these figures we can see that sales volumes have been very consistent year-on-year 554 vs 540 and the medium sale price is virtually identical as well.
These two indices support what I have been saying for several months now, our local market is very steady and has favoured neither buyers or sellers for quite some time. Prices have remained remarkably steady with minor monthly fluctuations recorded depending on sales activity for that specific month. We currently have a good steady stable Christchurch market, sitting between the peak of the economic boom of 2007 and the lows recorded following the quakes in 2010/11.
What is interesting is that the days to sell has lengthened in the past year from 37 to 47 days on average. Some commentators will no doubt say this is a result of a slowing market or some such other reason they have heard about.
Whereas I think it has a far simpler explanation and it relates more to a perceived change in the best sale method by the public and perhaps some of the consultants here in Christchurch.
As a city, Christchurch has for quite some time been regarded as the auction capital of New Zealand and a large proportion of our listed stock has been promoted and sold via this method of sale. But for some inexplicable reason the volume of stock listed as an auction has dropped. The volume of listings is only slightly lower when comparing year to year, but more significantly the percentage of the listings being sold by auction has dropped significantly.
Looking at Harcourts figures in Christchurch, 40% of all listings in February 2017 were for sale by auction. Whereas this year, February 2018 only 30% were listed as an auction and this scenario has been a trend for the last few months now. What is even more intriguing this is not isolated to Christchurch but is a trend seen throughout New Zealand.
When you factor in that fewer vendors have been choosing to auction in recent times, then the result has been that property transactions have taken longer to conclude. Quite simply if your preferred property is not in an auction campaign that requires a buyer to “act”, then buyers are free to submit conditional offers, allowing themselves more time to do their due diligence and so the average time to sell gets longer. The property sales are still happening, just the average time to sale is extended. I don’t believe the change from 37 to 47 days represents anything more than the fact that more properties are in the “conditional sale” period now than there has been previously.
Why then would this be happening?
Once again, I believe there is a simple answer, the owners selling property have been used to a stronger more confident market over recent years and as the effects of Government and banking policy have slowed down (but not stifled) market activity, potential vendors have perceived that there might be a better alternative to auction. There is no doubt that Harcourts as a company and a brand promote and prefer auction as the best and fairest method of sale.
After all – buyers get to see who else is interested on the day, who else is bidding and as a buyer you can decide whether you are prepared to pay a little bit more than the next person or not. It is, I believe, a lot fairer than the ‘closed offers’ one chance’ scenario that might otherwise prevail with other methods of sale. As a ‘cash buyer’ you get the first opportunity to bid on and buy your preferred home, while from the vendor’s perspective you get the opportunity to present your property to the ‘cash buyers’ first and achieve a confirmed sale on the terms that you prefer. If there are no cash buyers on the day, then all interested parties now get the opportunity to make an offer immediately ‘after auction’ be it conditional or cash.
What could be fairer? This is the reason that so many auction properties are signed up in the days immediately following the nominated auction date. In the trade we call this “stage three”. From a vendor’s perspective an auction is as much about the process, as it is about the price. The process to achieve the best possible price, in the best possible time frame.
I would advise anyone looking to sell to talk to their local Harcourts consultant about the auction method of sale. It’s fair, it’s transparent, it allows some control, it will generate the desired result in most instances compared to other methods and I believe there is an economic benefit (but that’s another story). Yes - it costs a little more, but I firmly believe the benefits significantly out way the perceived disadvantages. Talk to your Harcourts consultant today – there is a reason they are among the best at this method of sale.
Jim Davis (South Island Regional Manager)
Mortgage brokers are pointing to early signs of the major banks opening the door to more low-deposit borrowers in the wake of an easing in home-loan restrictions.
On January 1 the Reserve Bank increased the cap on banks from 10 per cent to 15 per cent of lending to home buyers with a deposit of less than 20 per cent. Investors also received a slight reprieve with the equity requirements reducing from 40 per cent to 35 per cent with 5 per cent of lending to investors allowed outside of that.
John Bolton, managing director of Squirrel Mortgages, said he had noticed two big changes since the lending restrictions on the banks were eased. "One - everyone is open. Last year for periods it was just really hard to do anything."
Last year brokers reported having to go from bank to bank to see who had the capacity to lend with it changing on a weekly basis depending on what lending they had approved.
Bolton said the cap increase from 10 to 15 per cent was not huge but it did alleviate capacity issues. Bolton also said the second change he had noticed was an increase in interest from first-home buyers.
"There is a lot of enquiry around at the moment. We are looking at a lot of applications in that over 80 per cent space."
Government is extending the amount of time for which investment properties must be held before their owners can avoid capital gains tax - despite a warning that it could be bad news for renters. Revenue Minister Stuart Nash confirmed the "bright-line" test would be extended from two years to five in legislation working through Parliament.
"The extension of the previous government's bright-line test will help dampen property speculation and make homes more affordable," Nash said.He said reducing speculative demand would help to improve affordability for owner-occupiers.
But in an impact assessment, Inland Revenue and Treasury officials warned there was a risk of "lock-in" as a result of the change, which could reduce the number of dwellings for sale. "If the fall in the number of dwellings for sale exceeds the reduced demand from speculators and investors then this could lead to increased competition for the housing stock available for purchase for a period of time."
They said there was a risk that rents could rise if the law change reduced the number of investors buying and renting out property. "A higher level of home-ownership among former renters is unlikely to completely offset the pressure on rental prices. This is because owner-occupied homes typically have a lower occupancy rate than rental homes, so the reduction in the supply of rental housing (caused by some investors exiting the market) will probably outweigh the reduction in demand for rentals (as some renters purchase homes)."
Gareth Kiernan, chief forecaster at Infometrics, said the rule change would make a difference. A two-year limit would stop people who were flicking properties on in a speculative boom, but two years was not a long time to have to plan to hold a property. "With five years, that's quite a long-term decision you're making there."
Cameron Bagrie, of Bagrie Economics, said it should be seen in the context of wider structural changes to the market as the Government changed migration settings, reassessed the tax system, and pushed ahead with its building project KiwiBuild, as the banks' attitude to lending changed. "There's a lot of uncertainty in regard to how that's going to impact the market."
The extension from two to five years would make a difference, he said, but it had to be seen in context.
For more than 30 years Twiss-Keir Realty has worked alongside, and invested in, the Canterbury community, successfully negotiating tens of thousands of sales for its clients. Little wonder it is known as your home for local property. Harcourts Twiss-Keir Realty, have offices strategically located in Belfast, Hanmer Springs, Hornby, Kaiapoi, Rangiora, Rolleston and The Palms.
As experienced negotiators, you may be surprised to know that for us there are some things that are never negotiable and that’s because our success is down to our commitment to a few very simple rules.
We are also unique in having experts in a wide range of specific property types through Harcourts Developments – a specifically designed service that specialises in marketing larger and more complex property projects.
So whether you’re developing a subdivision, looking to market your viticulture business, sell the farm or sell or lease a commercial proposition, we have the experts to make it happen.
Twiss-Keir does specific, not generic, so positioning your property so it lands exactly in front of your target market is the job of our marketing department, offering tailored marketing options that maximise the unique attributes to get the outstanding result we both want and expect.
When you need good people getting good results then it’s time to talk to us.
Phone 0800 789 1011 or visit our website www.twisskeir.co.nz.
Buying an existing business is sometimes preferable to establishing one from scratch. This article gives some pointers (but not an exhaustive list) to prospective purchasers to help you with this process.
There are many positive aspects in purchasing a small business. The most important aspect of the Agreement is the price which you are paying, and it’s important to ensure that this price is backed up by the proven profitability of the business. We strongly recommend that you have an accountant review the financial information before you sign on the dotted line.
Be sure that the business which you are taking over on the settlement date is the business which you have purchased. Talk with your local NAI Harcourts Business Broker and seek independent advice at this initial stage – they may be able to help you spot trouble before you commit. Taking the time to visit the business premises can also give you a feel for the real atmosphere and dynamics within an organisation that the balance sheet doesn’t necessarily provide.
Most small businesses often rely heavily on key personnel and you need to know who those key people are, and if necessary incorporate a provision in the Agreement to cover their continued employment situation. Enthusiastic and experienced employees can make or break a business. Getting employment clauses right in a business sale and purchase agreement can also help you avoid difficult and unnecessary problems. Your local NAI Harcourts agent can help with this process but you also need to obtain independent legal advice.
Buying the company v buying the business
You should consider establishing a new entity to run the business to minimise the risk of inheriting company debts, contracts and liabilities that may not have been disclosed to you. This also separates out your business venture from any existing companies that you own. The cost of incorporating a company is relatively small and enables you to tailor the constitution and ownership to your own needs. If the company name is the business name you want to retain, you should negotiate for the vendor to change their company name and free up that name for your use.
Restraint of trade clauses will bind the vendor company but not the vendor’s directors, shareholders or employees unless they enter a separate deed. As with key personnel, make sure that you are tying in the commitment of those who can help you set up the business for success.
Buying a successful business is only part of the equation – in most cases you need a place to do business. If you lease premises, this is often the biggest cost and the longest commitment involved in the business. Make sure that you are comfortable with the terms and length of the lease, the outgoings and all the fine print. Be aware that it may be possible to negotiate a variation of lease or further rights of renewal as a condition of the purchase. Depending on the nature of your business, this can be the best investment that you make. If location is important, check that you have sufficient rights of renewal.
The Sale and Purchase Agreement
The wording of the Agreement is important for your protection. Minor errors in an Agreement can lead to huge financial cost – this is not the place to cut corners! Working with your local NAI Harcourts Business Broker and seeking independent legal advice in the negotiation stage (before you sign!) can help avoid unnecessary conflict or unrealistic timeframes. After the Agreement is signed, map out a timeline of all the matters to attend to before settlement and allow yourself some extra time to double check at each step rather than lock yourself into a timeline that is inflexible or creates unnecessary pressure.
If you’re thinking about buying an existing business, invest some time and talk with your local NAI Harcourts Business Broker and seek independent legal advice early on – it will add value to your purchase.
Our summer began with a record setting dry spell, the start to the New Year has been somewhat more variable, this changeable weather has brought the much needed moisture to grow our crops, feed and grass here in Canterbury, often change can bring about beneficial consequences.
We’ve had our own change recently with the ownership of Harcourts Four Seasons Franchise transferring to the owners of the Harcourts Twiss-Keir Franchise, resulting in consistent ownership throughout the rural districts of Selwyn, Waimakariri and Hurunui. This consistency further enhances our ability to provide the very best Real Estate advice and service by ensuring a solid foundation and coherent commitment to the Canterbury sector.
The acquisition of the Hornby and Rolleston Offices was an obvious one for Twiss-Keir Realty, with both teams having similar cultures and strong focus on the rural lifestyle sector, residential and commercial markets and Property Management in the Canterbury area. Our clients will now have the combined expertise of over 90 local salespeople across the region to assist in selling your properties.
It is an exciting time for the Twiss-Keir/Four Seasons businesses and we look forward to helping clients in their real estate dreams.
Picture: Ross Mitchell Branch Manager Rolleston Office & James Twiss Business owner and Branch Manager Hornby Office.
As a team of professional marketing and negotiating consultants we are committed to excellence in service and results. Our sales consultants live locally and have a great deal of knowledge and enthusiasm for their community.
Call Harcourts Twiss-Keir Realty and experience the difference! 0800 789 1011 | twisskeir.co.nz
... With a big November rebound, according to the Real Estate Institute which announced a rise of almost 18 per cent in the number of properties traded last month compared with October.
"The number of properties sold in November across New Zealand increased 17.8 per cent from the previous month – the largest October to November increase seen in six years," REINZ has just announced this morning.
"The number of properties sold in New Zealand excluding Auckland increased 19.4 per cent per cent month-on-month and in Auckland it increased 13.9 per cent month-on-month.
"All regions, except the West Coast, saw sales volume increase in comparison to October," it said.
Sourced from The Herald website
Licensed Business Owner of Harcourts Twiss-Keir Realty
Licensed Business Owner of Harcourts Twiss-Keir Realty