$10,000 drop in house prices helping buyers

[muppet]

$10,000 drop in house prices helping buyers

By Anne Gibson
5:30 AM Tuesday Apr 5, 2011
The national median house price is $350,000. Photo / Chris Skelton


House prices have fallen nationally $10,000 in the past three months, and affordability is increasing around the country.
Massey University's latest home affordability report, out yesterday, showed the national median house price was $350,000.
Queenstown, Auckland and Wellington are the most expensive places when house prices are matched to average wages and average mortgage interest rates.
Invercargill, Dunedin and Palmerston North are the most affordable.
The director of the university's real estate analysis unit, Professor Bob Hargreaves, said that in the three months to February Central Otago Lakes was the least affordable region, followed by Auckland and Wellington.
Southland retains its place as the most affordable region. Otago is in second place and Manawatu/Wanganui third.
Nationally, home affordability improved in the quarter by 5.2 per cent.
Professor Hargreaves said the figures were good news for house buyers as mortgage rates went down and wages increased.

See more in the Granny

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10717105

[Viking]

Really, well where are all the buyers then?
Have not been evident this year. What a load of bollocks these people write.

[damage]

Personally I think the buyers are there, but its the sales method that is stopping transactions from happening.
In my case, my wife and I are looking to buy another home here in AKL, but every property that we are interested in is being sold by auction.
After 3 cases where we have been outbid, we have given up for now simply because we are spending $500 a go on a builders report and valuation only to really have no idea what it will sell for on the day.
Selling by auction makes it a sellers market in reality

[Viking]

Buyer's market gone
Sunday, 10, Apr, 2011 9:41AM It is no longer a buyer's market for homes in Auckland. Barfoot and Thompson has revealed the average sale price in the city hit an all-time high during March: $580,000. The number of deals during the month was also up sharply.
Property consultant Olly Newland says prices are rising partly because of low interest rates, a slow-down in building, and high immigration. He says there are plenty of homes in the two to three million dollar range, but very little for people on a more modest budget.
The cost of renting a home in Auckland also seems likely to increase in the year ahead. Mr Newland says the demand for reasonably-priced homes will rise, putting more pressure on the market. He says the cost of renting a home will also increase, as rents are very low compared with the value of the properties they are renting.

[Baby Boomer]

Personally I think the buyers are there, but its the sales method that is stopping transactions from happening.
In my case, my wife and I are looking to buy another home here in AKL, but every property that we are interested in is being sold by auction.
After 3 cases where we have been outbid, we have given up for now simply because we are spending $500 a go on a builders report and valuation only to really have no idea what it will sell for on the day.
Selling by auction makes it a sellers market in reality

Yes, it puts me off too. Also, the three week marketing campaigns leave little time for errors to be sorted out before bidding begins. I'm not sure the people winning the auctions are actually getting value for money in some cases.

One agent told me that you are either seriously looking and have your finance sorted and your homework done or you are kicking tyres when it comes to auctions. I would not even buy a car at auction let alone a house, it feels like gambling. All property I've seen have drawbacks and weighing these up takes time. Even better is a price on the property which is pretty rare these days.

[Davo36]

I agree with this Baby Boomer. So many people sign up for auctions. The only people they serve are agents.

They have some very simple yet powerful dialogues which they can use with vendors to get them to sign up like:

• A month ago we took a property to auction and the owner wanted $300,000 but we got $375,000. This really appeals to people's greed. The start thinking "That might happen to us...".
• All the buyers are cashed up and ready to buy. You'll only be dealing with serious buyers. What they don't say is that it puts a lot of people off.
• It'll only take 4 or 5 weeks and then you can move on with your life. People are very impatient and want quick fixes, so this appeals a lot.

They never talk about how they will condition the vendor down, will basically force them to set a low reserve etc. etc.

Bring back the good old days I reckon, put a damn price on the things!

[Baby Boomer]

Auctions not altogether popular

Why can't agents read the current situation more reliably? Or is that the property market is unstable as vendors and purchasers re-learn what steady ground feels like? Or do we have a different breed of agents working the market now?

All they have to do is listen to people and find a middle ground, surely its not too hard? They are not driving the market, they are the vehicle.

[AMR]

Yep I make a point of telling the agent that I would only be interested in the property if it gets passed in at the auction.

My other gripe is price by negotiation where the agent says "We don't know what their expectations are - you'll have to put in an offer." In which case I take 10% off the price I was going to offer and throw it in.

[speights boy]

All they have to do is listen to people and find a middle ground, surely its not too hard? They are not driving the market, they are the vehicle.

It worked in Tunisia, it worked in Egypt.
Social media makes it possible.

Buyers control the market, not sellers or agents.

Boycott or make your presence felt at auctions for a month or two, the vendors will get the message and tell their agents...no auction.

[SwissKiwi]

To stop so many auctions happening - do not attend auctions.

or

Do attend them - so you can complain about auctions - to auction participants.

?

[kane656]

Totally agree with BB and Davo... auctions are great for TV and emotions but really it just eliminates quite a number of potential buyers from market – like myself.

A good friend once spent over $2K on builders reports and LIMs before he bought his first home. He vowed he would never buy at auction after getting out-bid time and time again. This is all well and good in a boom market. The problem for a vendor is that in a quiet market, my friend will not take on the auction process at all and may go to another property with similiar characteristics, simply because of the agent's choice of sale. This disappointment rubbed off on to me and I've only looked at PBN, set sale or asking price properties where I can attach conditions. As a vendor, I would want as many genuine buyers interested in my property as possible, rather than just looking at cash buyers speculating for a bargain.

The 'special' properties at the very high end of the market will always attract selected buyers in a position to buy cash unconditional, therefore auction is the best method. For the average buyer, looking at average properties, it's not an option.

K

[damage]

Totally agree with BB and Davo... auctions are great for TV and emotions but really it just eliminates quite a number of potential buyers from market – like myself.

A good friend once spent over $2K on builders reports and LIMs before he bought his first home. He vowed he would never buy at auction after getting out-bid time and time again. This is all well and good in a boom market. The problem for a vendor is that in a quiet market, my friend will not take on the auction process at all and may go to another property with similiar characteristics, simply because of the agent's choice of sale. This disappointment rubbed off on to me and I've only looked at PBN, set sale or asking price properties where I can attach conditions. As a vendor, I would want as many genuine buyers interested in my property as possible, rather than just looking at cash buyers speculating for a bargain.

The 'special' properties at the very high end of the market will always attract selected buyers in a position to buy cash unconditional, therefore auction is the best method. For the average buyer, looking at average properties, it's not an option.

K

I'm hearing ya, but they still sell at the end of the day. Would love to know how many get passed in

[WGN ex-property manager]

An auction is an effective way to get a sale price one increment over the maximum price of the second place bidder. The winner could have had another $100K in them and you'll never know. If there is no 2nd place bidder then all you get is a low-ball bid from the sole interested party.

If you have a time constraint then closed tender is the way to go.

[damage]

An auction is an effective way to get a sale price one increment over the maximum price of the second place bidder. The winner could have had another $100K in them and you'll never know. If there is no 2nd place bidder then all you get is a low-ball bid from the sole interested party.

If you have a time constraint then closed tender is the way to go.

The so called low ball offer would be greater than the reserve I would have thought?
Also, how would a closed tender be useful when time is constrained? Surely a fixed / open price would be better if you are in a hurry?

[Keys]

The so called low ball offer would be greater than the reserve I would have thought?

If there is only the one bid and it's 10% below the reserve. Where do you go? If there are two bidders and the winner could have gone to 15% above the competing bidder...................