08 Feb What Lies Ahead?
It’s that time of year again when we’re all trying to look ahead and predict the movements of the property market. If only we had a crystal ball! And predicting for 2018 seems trickier than usual after plenty of fluctuations in the market in 2017….
In the end all we can do is look at the usual economic indicators and what they suggest 2018 will bring.
A number of those key indicators suggest both buyers and sellers should feel confident heading into this year. Business confidence is still reasonably strong, and it was pleasing to see we finished 2017 on a relatively strong note in the property market with property prices up 3% on the same month last year nationally, and up by 10% and 13% respectively in the busy Wellington and Central regional markets. Both those regions also recorded increases (of 7.7% and 6% respectively) in the number of sales compared to December 2016.
All this late-year activity – a period that is traditionally very quiet for us – suggests that some of 2017’s market disruption was the result of, first, the election campaign and then the arguably unexpected election result. Once buyers recovered their confidence from the election they were given another, small early present from the Reserve Bank with a slight easing of LVR restrictions, which is, hopefully, an indicator they may ease further in the coming year.
We also still have relatively low interest rates which should be a lure to buyers. I sincerely believe your money is better off in the property market than sitting in a bank account earning only 2% or 3%. The other factor to consider is that while we may not see the skyrocketing values we’ve seen over the past three years or so, I don’t expect prices to start seriously dropping either.
What that, with all the other above factors, adds up to is stability. And stability is our friend. If you want to sell your house quickly for a big return, you’re potentially going to have to work a lot harder in partnership with your sales consultant. But for almost everybody else – buyers and sellers, investors and owner-occupiers – stability means the ability to financially plan. For buyers, particularly investors, there will be some good opportunities out there with a great chance of predicting future sales value and planning accordingly. If you are even remotely thinking about buying, now is the time.
Sellers may require a little more patience and realism than they needed in 2015 and 2016, but with good sales consultant advice, and a well-prepared marketing campaign they will find those newly motivated buyers.
If there is one change I would like to see in the market in 2018 it is the sustained belief among vendors that auctions are an effective sales method only in a strong market. That is something we, at Harcourts, will
continue to work to change. I maintain it’s doing buyers a disservice and robbing them of opportunity.
The crucial thing sellers should remember is that in an auction campaign, they always retain control. They are under no obligation to sell for less than their reserve. Meanwhile, they will have the benefit of a highly focused marketing campaign designed to motivate buyers and, when you list with Harcourts, a highly skilled auctioneer, all working to sell your property for the best possible price.
Overall, I think the key messages for 2018 are don’t panic, plan ahead where you can and be ready to move on opportunities as they present themselves.
By Harcourts NZ CEO Chris Kennedy – February 2018 – Harcourts Property Focus