COMMENT: Over the past few weeks my columns have been focusing on the current uncertainty in the property market; not because I believe that a “crash” is coming (I don’t), but because I know that people are nervous and I want to provide practical reassurance to those of you who are scared by the headlines and to remind you that you should have confidence in the property market.
I’m drawing a lot of the material for these columns from articles I wrote back in 2019 during another period when the prophets of doom were attracting more attention than their predictions actually merited. Then, as now, there were regular warnings of a market crash causing angst amongst some and fuelling the usual calls for the Government or the Reserve Bank to protect us all from the coming disaster.
But what “actually” happened in 2019? Nothing. The market didn’t crash and, a year later, it took off again, experiencing the single largest increase in house values in the history of our nation over an 18 month period.
But instead of learning from this, and other regular bouts of nervousness, we seem to have developed a kind of collective amnesia about these events, which is sad, because if we remembered them, we’d be a lot more relaxed about most of these silly predictions. Instead, we buy into the predictable refrain of “this time it’s different” – a claim that the pessimists use to mean that, although the New Zealand housing market hasn’t crashed since the 1970s, the particular circumstances facing us “this time” mean that the crash will finally come. However, this claim is somewhat blunted by the fact that it has been repeated so often over the past thirty years that it should be trademarked and produced as a T-shirt.
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Ashley Church: “Good presentation and realistic pricing are important.” Photo / Ted Baghurst
That said, there’s no question that we’re in a flat period right now – made all the worse by the fact that we’re contrasting it against the heady heights of last year’s price boom, which means it looks even worse than it is. This is having an impact on confidence and causing buyers to be cautious – and while it won’t last, its effects are real right now. Because of this, houses are taking longer to sell and, whereas a year ago, almost anything put on the market was selling and real estate firms were clearing out stubborn old pocket listings, right now, even sound attractive homes are taking longer to sell, sometimes considerably longer.
During such times good presentation and realistic pricing are important, but, sadly, there are some homes which have a “stigma” and will be harder to sell because of features or conditions which are often out of the vendor’s control. While there are many subjective things that can put someone off buying, there is general agreement about the main things which “stigmatise” a property. They include:
1. Location. Perhaps unfairly, there are some suburbs in some of our towns and cities in which it is considerably more difficult to sell a property. If the average house value in your area is considerably lower than the average property value for your town, you may live in one of these.
2. Noise. While less of an issue in CBD locations, constant noise (particularly road noise) can be a major turn off to potential buyers.
3. Plaster exteriors. So strong is the stigma associated with the ‘leaky homes’ fiasco of the 1990s and early 2000s that even weathertight homes built well before this time are affected by it simply because they ‘look’ as if they have a plaster exterior, and often potential buyers will refuse to even view such properties based solely on a listing photograph.
4. Neighbouring houses. Remember how your mum told you that we’re judged by the company that we keep? Well it’s true of houses too. Even well-presented, well-maintained homes with manicured lawns can be stigmatised if they’re next door (or close) to derelict properties with decaying facades, un-mowed lawns, or a pile of car bodies piling up.
5. Access. A strangely shaped, steep or narrow driveway; a tight turning area, or an excessive number of steps can all put people off buying and can be difficult to remedy.
6. Lack of parking / garaging. With the exception of cities like Wellington, where such things appear to be par for the course, a lack of off-street parking and garaging will generally be an obstacle to selling a home.
If you’re in the market to sell a property affected by one of these things, anything that you can do to reduce or remove the stigma will obviously improve your prospects of a sale. And remember, time and price are your friends. The longer you can wait – and/or the more you’re prepared to negotiate on price – the greater your chances of finding someone who is prepared to look past the problems and purchase your property.
- Ashley Church is a property commentator for OneRoof.co.nz. Email him at [email protected]
