The latest release of the real estate market figures for the trading month of August makes for amazing reading in the current climate. There is no doubt that the trading figures nationally were pretty much unpredictable a few months back. But now, as the picture of our current environment starts to solidify, we are in a position to perhaps see more clearly and predict what is likely to happen going forward. The national data reflects, to a greater or lesser extent, what is also happening in our market locally. Looking at national data first, the national Days On Market figure is the lowest seen in an August month for the last 4 years.....Property is selling quickly Inventory levels, that is listing stock across all companies, have been dropping for the last 14 months in a row to the lowest level on record........The industry is selling property quicker than we are able to replace it. Median sale prices are rising month on month in literally all regions......property is getting more expensive. REINZ house price index is at a record high........property is likely to remain expensive. Auction numbers are up to 16% of all sales recorded.......people are realising that auction achieves the best possible price. Here in Christchurch, there were 606 residential sales recorded for the month, our Median Sale Price jumped to $495,000 and days on market are now down to the typical 32 days we come to expect in our city. So, what does all this mean for us here in Christchurch? Two years ago, our August Median Sale Price was $439,000, last year it was $444,000, last month it was $490,000, and now it’s $495,000. Quite simply, the pressure on the housing market across New Zealand is just too strong and, for all sorts of reasons, that pressure will not be going away in the short term. As a country, we were supposedly already 100,000 odd homes short pre Covid. Now it is predicted that, in the next year or two, a few hundred thousand Kiwis are looking to come back from overseas with their families to the relative safety of New Zealand. That is potentially another 100,000 odd homes needed just to house these returnees. Logic makes you ask, where are they all going to go? The media, particularly in the last few weeks, has been full of stories about auctions being on the rise and property being purchased sight unseen. On the news recently I heard that New Zealand has already had close to 50,000 people return since Covid struck, and that’s likely to be the tip of the iceberg. These are the people who are the “Brain Gain” that we as a country are now hearing about. So, what can we expect from here? Logic again tells me that as the pressure mounts, finding stock to sell will be the main issue. People will refrain from selling without having somewhere to go to and this will only mean one thing, prices just have to rise. Property that is placed on the open market and allowed to be marketed properly will sell for a premium. As available stock dries up (and this is already happening nationally), it’s logical that any newly listed property that is marketed properly will attract interest and thereby the premium I am talking about. I will go on record now and say that, in my opinion, it is unlikely that prices will drop soon. We will just see a shortage of stock and increasing numbers of interested buyers. To take advantage of this type of market, a seller needs to utilise the services of a real estate company. If you’re looking to sell, then you might as well use the biggest and the best at auction because that is how you will maximise your return as a seller. Yes, anyone will be able to sell privately, but there is no doubt that you will undersell in the current climate. Jim Davis Christchurch & South Island Regional Manager With so many new rules and changes being implemented to the Residential Tenancy Amendment Act, it's important you know you your rights and obligations. Let’s take a look at the changes,
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Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Greg Roberts
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September 2020
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