COMMENT: If you’ve been following my property writings for a while you’ll be well-acquainted with my view that the housing market adheres to broad cycles and that observation of these cycles allows us to broadly understand what the market is doing.
It’s worth noting that this view is not generally shared by economists and other property market commentators, most of whom base their views of the market on their estimation of the consequences of the events playing out at any given point in time.
Despite this, I continue to put my stock in cyclic trends – partly because this approach has allowed me to make some very accurate market predictions over the past 20 years, and partly because these trends are continuing to play out right now, even as market doomsayers try to claim that ‘this time it’s different’.
A good example of this is my oft-repeated claim that the Auckland market is around three to four years ahead of the rest of the country – which means that regional New Zealand goes into a property boom around three years after Auckland. It also means that Auckland flattens earlier than the rest of New Zealand and this is exactly what happened in 2017. The Auckland market flattened off while the market in the rest of the country stayed buoyant.
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If this trend remained true to form you’d have expected to see the Auckland market take off again in 2020 and the rest of New Zealand starting to flatten off. This is exactly what happened, in the case of Auckland – however, the market in the rest of the country actually got stronger as buyers reacted to the sugar-rush of cheap easy money as one of the consequences of the Reserve Bank decision to drop the OCR to historically low levels.
But that was never going to last and, as I’ve repeatedly predicted would happen, over the past couple of years, regional New Zealand is now going into a period of flattening that can be expected to last for 3 or 4 years.
Ashley Church: “Vendors should be using an agent, despite the temptation to try and save a little money by doing it themselves.” Photo / Ted Baghurst
So it’s particularly notable that some of the articles that I wrote back in 2019 and 2020, with the Auckland market in mind, now have relevance to regional New Zealand. Just last week I wrote about the 8 things you need to know if you need to sell right now and included among those points was a recommendation that vendors should be using an agent, despite the temptation to try and save a little money by doing it themselves. That brings to mind another article, which I penned back in early 2020, which talked about the five things you should look for in a real estate agent – and those points are still just as relevant today:
1. Talk to a few agents before you sign a listing agreement
Unless you’ve been referred to an agent on the endorsement of someone you trust and who has used their services – it’s a good idea to ask 3 or 4 Agents to pitch their services to you.
2. Don’t list based on the highest price promised
Sadly, and particularly in flat markets, there’s a tendency among some agents to “buy” business by promising to get a better price than others – then conditioning you to accept a lower offer once the listing is secured. Often, this means that a more experienced and realistic agent misses out on the business, and you end up with a lower sales price than you could have achieved.
3. Examine the agent’s sales history
As a general rule, someone who has sold more houses is going to be a safer bet to sell yours, so ask to see sales volume (how many houses they’ve sold in the past 12 months). The prices they achieved won’t be as relevant as market expectations have changed, but an agent with a solid record of consistent sales who is selling houses that are similar to yours is probably a safe choice to list with.
4. Find out the average time to sell
The time it takes to sell a house is getting longer, but a good agent will be able to provide you with some idea of what’s happening in the current market, as well as information on his or her track record in this respect. The importance of this measure will depend on other factors such as whether you’re buying another property – but if speed is of the essence, select an agent with this in mind.
5. Find how long they’ve been in the industry and how well they know your area
While there are exceptions to this last rule – you’re generally wise to appoint an agent who has been around for a while and who is familiar with the location is which your house is situated.
- Ashley Church is a property commentator for OneRoof.co.nz. Email him at [email protected]
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