The Bays - Good Prospects On The Horizon

Sales for St Heliers, Glendowie, Kohimarama, Mission Bay, and Orakei slowed over January. As you would expect. After all January is a prime holiday period. February however seems to have started the month determined to kick January for touch. Buyers are back and they are determined to buy. Want to know how much your house is worth without seeing a real estate agent?....Free Online Property Appraisal....Make sure you see this one.

Some interesting points of note

• Some buyers have started to realise that this is 2011 and the revised Capital Values are due out this year. Some buyers have been hopeful that capital values will stay the same. Others have been a bit more realistic: “I don't remember capital values ever going down”, to quote one buyer. You would have to agree
• Another pattern which has only started to peep over the parapet are plaster homes starting to sell for pretty close to the capital value if not for a bit more. Admittedly plaster homes still take longer to sell but the fact the sales prices have begun to more closely match capital values is good news for monolithic home owners. It also supports statistics in previous posts that prices in The Bays must be creeping up
• Rents are on the move. They are now pretty high in sought after suburbs and will likely go even higher. It is good news for property prices because it improves yield (return on the dollar invested) for investors and encourages renters to become buyers. When renters become buyers – and some definitely will - this will swell the buyers ranks, increase buyer competition, enhance demand, and encourage property prices upwards
• Commodity prices have moved up. Dairy farmers for example, have had good payouts and this will have a flow-on effect to the economy generally of which real estate forms a big part.

On the flipside, the Christchurch earthquake will undoubtedly dampen the economic recovery. Christchurch makes up 15% of Gross Domestic Product (GDP) and that represents a lot of taxes the Inland Revenue will not collect for some time to come (due to loss of profit and income from productive businesses and their employees). Additionally, the people of Christchurch will need government assistance to get them back on their feet and the money has to come from somewhere.

Recently there has been talk from economists about the Reserve Bank reducing the Official Cash Rate (OCR) in response to the Christchurch earthquake to give the economy a further kickstart. Reducing the OCR will promote inflation. From a real estate perspective, this means prices go higher and buyers pay more.

In a rising market sellers pay more than they got for the sale of their own property just to get a home equal to the one they sold. Of course the best time to sell is on a downward moving market because the next property the seller buys will be bigger and better and bought for less.

However statistics indicate the downward trend in The Bays has bottomed out and prices have started to rise. So if you are an owner thinking of upsizing, downsizing, or moving to a particular type of property or a particular area, you may like to think about reducing the loss and enjoying the profit by moving now. Ever wondered how much a property sold for in your area of interest? Now you can see for free. Sales Statistics....Be sure to have a read.