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issue Three

2011

BAYLEYS REAL ESTATE LTD. MREINZ

YES, A MARKET CHANGE IS IN THE AIR (Tony Alexander) NEW LISTINGS

FACTORS INFLUENCING THE REAL ESTATE MARKET Tony Alexander condt.)

EXPLODING THE MYTH! “Winter isn’t the best time to sell.”

NELSON’S ANNUAL MARKET RYTHYMN ...& HOW BEST TO USE IT.

LATEST SALES


TESTIMONIALS Ingrid & Ashley Cooper We met Jeremy three years ago while house-hunting. He was friendly, no pressure, always available, honest, and sympathetic with our relocating emotions. He is knowledgeable and businesslike without pretence or stuffiness, and to top it all, he's just a nice guy!

Alison and Philip Innes-McLiesh We've known Jeremy professionally for more than seven years and have consulted him about property matters on a number of occasions. We've found that he's knowledgeable of real estate within our region and always pleasant and cheerful. He provides an optimistic yet very realistic appraisal of property valuations and listens carefully to our needs, concerns and expectations.

Rosemary and Phillipe Gauthier Jeremy has proved himself to be reliable, honest and knowledgeable. He has helped us find and purchase a beautiful property while making the process straightforward and pleasant. We wouldn't hesitate to use him as our agent again.

Raefe Murray Jeremy's service is exemplary. He is naturally courteous and personable, but I particularly appreciated his honest and candid approach, his integrity and professionalism. Everything I asked of Jeremy was done in a timely manner, with a positive attitude and thus I found him very easy to work with. I have no hesitation in recommending his services to others.

...at your place

is the newsletter of Jeremy Matthews Licensed Real Estate Agent REA-Act 2008 Disclaimer: Whilst all care has been taken to ensure accuracy in the preparation of the particulars contained herein, no warranty can be given for the above information.


M

arket Rising While prices eased off slightly in May and migration trends are worsening, the underlying drift in real estate activity and prices is upward as the labour market improves and awareness of a worsening housing shortage increases. Turnover Improving in many regions now. Dwelling turnover has been increasing in New Zealand over the past three months with a gain in sales of 2.6% seasonally adjusted in May and 5.5% in the three months to May compared with the three months to February. Sales in this period in fact are now ahead 0.2% from the same time a year ago but at 55,389 the number of dwelling sales in the past year is down 17% from the year to May 2010 and well below average annual turnover for the past decade of almost 89,000 dwellings.

“To help Kiwi businesspeople and householders make informed financial decisions by discussing the economy in a language they can understand.”

SOLD

The improvement in activity in recent months is becoming reasonably well distributed though numerically the biggest gains are occurring in the country’s largest region by population of Auckland with a gain of almost 13% in the past three months and 9% from a year ago. Central Otago (Queenstown, Wanaka) is showing a strong rebound in activity following a period when an oversupply of apartments kept the market in check. And turnover is also picking up in the prime farming areas of Otago, Southland, Waikato, Taranaki and Manawatu/Wanganui. Activity in Canterbury/Westland is clearly depressed by the earthquakes which continue to strike Christchurch.

Jeremy Matthews Residential Sales Specialist & Auctioneer ph: mob: email:

03 546 9455 0274 379 485 jeremy.matthews@bayleys.co.nz

“...the underlying drift of real estate activity and prices is upwards.

“...improvement in activity in recent months is becoming reasonably well distributed.


R

eal Estate Overview

We can also see evidence of improving activity in the BNZ-REINZ Market Survey http://tonyalexander.co.nz/bnz-reinz-survey which found for the third month in a row a net positive proportion of licensed agents reporting more people coming through Open Homes and a higher proportion of Written Sales going unconditional. However requests for appraisals have eased recently indicating that vendors either are still hesitant about buying into the recovering market story, or are pulling back from feeling that they have to sell now that activity is improving and a better price down the track may be possible.

P

rices—Early Cycle Tentative Rises Occurring.

The nation-wide stratified house price measure produced by REINZ fell 1.8% in May but given that this fall followed three months of rises totalling 4% the reduction is best viewed as an interruption in what we believe is a rising trend. Compared with a year earlier prices in May on average were down 0.7% from a year ago but ahead by 1.3% in the three months to May compared with the three months to February. Over the latest three month period average dwelling sale prices in Auckland have risen 4.1%, in Christchurch they have risen 1.2%, while in Wellington they have decreased 0.1%. Our expectation is that prices on average will move higher over the next two to three years driven in large part by a strengthening labour market and inability of rising construction to make much dent in a housing shortage we now estimate to be approaching 45,000 units. Note however that for the moment more licensed real estate agents in our monthly survey are reporting vendors as more motivated to reduce their price expectations than buyers to raise what they feel they need to pay. And more agents feel prices are still falling than feel they are rising.

Jeremy Matthews Residential Sales Specialist & Auctioneer ph: mob: email:

03 546 9455 0274 379 485 jeremy.matthews@bayleys.co.nz


D

ays to Sell. Slight Hastening of Pace Underway.

This measure needs to be treated with caution because if a person fails to sell their property within the time they want they often change agents and the clock resets to zero for that property. But keeping that in mind and assuming that from month to month this effect does not alter all that much we see that in May it took on average 43 days to sell a dwelling. This was 6.1 days longer than average whereas in April time to sell was 7.7 days longer than average and March 6.7 days. There may be a slow improving trend in this measure and if there is then the graph below suggests our expectation of rising average house prices is a reasonable one. That is, improving days to sell is correlated with improving prices. Note that the prices line is inversed so when it falls price inflation is rising.

And again, looked at on a regional basis we see that the strongest part of the country is Auckland where in May the number of days taken to sell a dwelling was almost equal to the average. Extracts courtesy REINZ (The Real Estate Institute of New Zealand) and The Real Estate Overview. 22 June 2011 By Tony Alexander. Chief Economist. BNZ Disclaimer: Whilst all care has been taken to ensure accuracy in the preparation of the particulars contained herein, no warranty can be given for the above information.


LOCATION, COMFORT, CLASS AND CONVENIENCE. 4 Richmond Ave. Nelson City. Purchasers with an eye for Nelson’s residential icons will recognise this architect’s signature style. She is one of only a few examples of his work discretely placed within the city’s greenbelt. They’re characterized by instantly appealing rough-cast exteriors, varied roof-lines, multi-paned windows and delightful living spaces within. This family-focused beauty’s first welcoming impressions enhance her comfortable pedigree, spacious civilized kitchen, sunny day-rooms and an elegant timbered stairway leading to romantic cottage-ceiling bedrooms aloft. Beautifully modernised with continental flare without compromising her quintessential Englishness. She is now a cosy, quiet, sunny, and secure home in a prime location with fragrant gardens around a fully self contained cottage. Central Trafalgar Street is just eight minutes stroll away with Nelson College for Girls and two exceptional primary schools around the corner. With her three bedrooms, two bathrooms, conservatory, formal living and dining plus double internal parking this property enjoys location, comfort, class and convenience. She is new and unique on the market. For more info on this property click here

$970,000


STUNNING RENOVATION OF SUNNY GRAMPIANS

Deadline Sale.

Located in a prestigious inner city street, within walking distance of colleges, preparatory and primary schools and a short drive from the city shops, art galleries, theatres, cafes and restaurants, this charming, five double bedroom home combines the architectural elegance of the art deco era with modern day comfort and facilities. There is a timeless quality in its classic lines and generous scale. Built on three levels to maximise the site, sun and outlook, the northwest facing home is surrounded by 787 square metres of low maintenance, professionally landscaped walled gardens and courtyards, connected by short flights of steps, walkways and a series of landings. A well-lit grass tennis court, at the rear of the property, is shared with a neighbouring property. The views are breathtaking as they sweep over the Haven, Boulder Bank and marina to the wide expanse of Tasman Bay and the snow-capped Western ranges, as they extend to Separation Point. It is an everchanging panorama of visiting ships, tourist vessels, yachts and pleasure craft, which can alter dramatically from a serene seascape to a spectacular Nelson sunset. For more information click here


SO MUCH MORE THAN MEETS THE EYE 5 Balou Pl.

Deadline Sale

Surrounded by 775 square metres of lawns, low maintenance landscaped gardens and generous outdoor entertaining areas, this stunning home faces north to enjoy all-day sun and views to the Richmond ranges. There is elegance in its clean uncluttered lines, calm colours and open light-filled spaces. The property’s superb location, central to all amenities, is immensely appealing. It is a comfortable stroll to the Richmond shopping centre, cafes and restaurants and a pleasant walk to schools, ranging from pre-school and primary through to intermediate school and colleges. The area is noted for its recreational facilities, including a myriad of well-maintained walkways, regularly used by school children and fitness walkers and runners and an ultra-modern aquatic centre. This is a lovely, light and airy home. High ceilings and cutaway and angled walls combine with numerous windows and glass doors to create a huge sense of openness and space. Sliding stacker doors in the living, dining and family rooms combine with sliding doors in the master bedroom to open up the house to decks to create a spacious environment for indoor/outdoor living and entertaining. Both decks were sanded and stained in February, 2011. For more information click here


A SANCTUARY OF CALM - 74 Trescillian Ave.

Deadline Sale

If your time to relax, slow down, and really enjoy life has come, then this home offers a wonderful base for a peaceful, easy lifestyle. Whether that includes long periods of travel, or the luxury of just being home, this low maintenance, sunny, brick home is ideal. Tucked carefully off the road, the home has been ideally positioned to make the most of the lovely views across The Haven, over the sparkling Tasman Bay and on to the Western Ranges, while providing an excellent level of shelter from the prevailing wind. Afternoons can be spent relaxing on the sun-soaked deck, either enjoying the scenery or taking advantage of the idyllic peace and quiet with your favourite book. Winter warmth is ensured with central heating, creating a cozy environment to share with friends and family, and with three bedrooms, an office and a childfriendly, easy-care section, this is a home that the owners and visitors alike will delight in. Make this your reality now. For more information click here:


AMAZING REFLECTIONS OF YOUR LIFESTYLE - 94 Pano-

Deadline Sale

114 Parautane Way Todds Bush Rd. Atawhai. This stunning home is a haven of tranquillity and beauty. From the moment you step inside the sun-kissed entrance its warmth and welcoming embrace draws you on until you’re standing at the living room window gazing out over the valley below, and to the sea and ranges on the horizon. The view is ever-changing and it’s as enchanting at night as it is by day. Set on 2.7 ha, the land is virtually maintenance-free and falls away on three sides to protect your outlook for all time. Outdoor living steps out from several parts of the home and the flow makes this a brilliant entertainer. The kitchen is an absolute delight but is simply representative of the overall quality of this special residence. The home has been enhanced by the current owners, to provide stylish, contemporary living with a high degree of comfort. Double glazing, triple car garaging plus carport and a home built across the width of the view to maximise that gorgeous panorama means this will be an opportunity you may not want to miss. For more information click here:


SUMPTUOUS SUN & SUPERB LIVING - 6 Jessie St. Mapua

Deadline Sale

Set on an elevated site well back from the road, in a quiet street of well-established homes and gardens, this very appealing home is a comfortable stroll to Mapua, a popular seaside village noted for its excellent cafes and restaurants, retail shops, art galleries and craft studios. Surrounded by 1,408 square metres of landscaped gardens and lawns and a two-level deck, the warm, sunny home enjoys a northerly aspect and views to the Seaton Valley hills. Architect designed by Richard Sellars and built in 2002, the 273 square metre, split-level, Linnea and adobe clad home offers generous indoor and outdoor entertaining areas, a master suite, two ensuite bedrooms, an office or fourth bedroom, and a powder room. The two ensuite bedrooms, on the upper level, are ideal for bed and breakfast or home-stay accommodation. The outdoor living courtyard is cleverly designed for shelter, sun, and privacy. This home has been a delight for the current owners who have enjoyed warm, elegant living, and enjoyed many summer evenings entertaining in the courtyard. For more information click here:


I

n this second section we will examine, where data permit, the factors which influence real estate market activity. What we get is a picture of a market facing factors turning positive.

Consumer Confidence – Trending Upward There has been quite a lift in consumer confidence about where the economy is going over the past month with the ANZ-Roy Morgan measure rising to 113 in June from 103 in May. A reading of 100 is neutral and the latest reading is the best since January. There is a broad correlation between changes in confidence levels and changes in the number of dwelling sales so rising consumer confidence is suggestive of rising housing market activity. One would expect higher levels of consumer confidence to encourage first home buyers into the market and that is what our monthly survey is finding. In June a net 19% of responding agents said they are noticing more first home buyers in the real estate market. Only a net 4% felt there were more investors around.

SOLD

Interest Rates – Very Supportive. Our view is that the Reserve Bank will not start raising its current record low 2.5% official cash rate until December. That means bank mortgage rates are likely to remain at current levels until then, though history would suggest fixed rates will rise ahead of floating rates rising as they are more heavily influenced by expectations of rate changes than floating interest rates.

Jeremy Matthews Residential Sales Specialist & Auctioneer ph:

03 546 9455


The most recent rate change was a 0.5% cut in the cash rate in midMarch following the Christchurch earthquake of February 22. Migration – Probably to turn negative. With earthquakes continuing in Christchurch it is likely that the deterioration seen recently in net migration flows will continue for the remainder of this year, possible taking the net annual migration flow into negative territory for the first time since mid-2001. In May in seasonally adjusted terms the net migration flow was a loss of 360 people which followed a loss of 130 in April and 520 in March. The net annual flow now stands at a gain of 4,625 from a recent peak gain of 22,588 in January 2010.

SOLD

Extracts courtesy REINZ (The Real Estate Institute of New Zealand) and The Real Estate Overview. 22 June 2011 By Tony Alexander. Chief Economist. BNZ Disclaimer: Whilst all care has been taken to ensure accuracy in the preparation of the particulars contained herein, no warranty can be given for the above information.

On average over the past ten years the net flow has been a gain each year of 16,000 people and the common assumption demographers use for modelling purposes is a net gain of 10,000 per annum. Therefore the boost to housing demand coming from migration flows is below average and easing off. Note though that it is not simply the Christchurch earthquakes causing the deterioration because even before the first event on September 4 last year the annual migration gain had fallen to 14,507 from the early 2010 peak. One of the key driving forces currently is a rising net loss to Australia caused by three factors. First there is the low level of the Kiwi dollar against the Aussie dollar trading currently near 76 cents compared with a ten year average of 85 cents. Second is the difference in labour markets with Australia’s unemployment rate at 4.9% and New Zealand’s 6.6%. Third is the catch-up outflow of people who would “normally” have shifted from New Zealand to Australia over 2009 into 2010 but did not do so because of uncertainty surrounding the global financial crisis and perhaps unwillingness to sell a house. On average over the past ten years the net loss of NZ population to Australia has been 20,500 but after hitting a relatively low 14,791 in April 2010 the loss has now risen to 27,938 and is likely to soon exceed the record loss of 35,395recorded in the year to December 2008. This large cyclical rise in the net loss of people to Australia coupled with the earthquake effect is likely to see the annual NZ net migration flow soon turn negative. We do not however expect a return to the situation seen between 1998 and 2001 when the net loss reached -13,000 and amounted to 37,000 in total. This is largely because we expect rapidly accelerating growth in the NZ economy from later this year bringing quick tightening of the labour market.


I

n this second section we will examine, where data permit, the factors which influence real estate market activity. What we get is a picture of a market facing factors turning positive.

Consumer Confidence – Trending Upward There has been quite a lift in consumer confidence about where the economy is going over the past month with the ANZ-Roy Morgan measure rising to 113 in June from 103 in May. A reading of 100 is neutral and the latest reading is the best since January. There is a broad correlation between changes in confidence levels and changes in the number of dwelling sales so rising consumer confidence is suggestive of rising housing market activity.

SOLD

Jeremy Matthews Residential Sales Specialist & Auctioneer ph: mob: email:

03 546 9455 0274 379 485 jeremy.matthews@bayleys.co.nz


“WINTER ISN’T THE BEST TIME TO SELL..”

W

hy do real estate markets slow down over winter? Sales stats tell us it actually doesn’t because life happens ready or not and folks buy and sell real estate all year round.

Real estate is about supply-and-demand so when supply slows in winter the number of weekly sales follows suit for some agencies. But why winter? Property owners look out their rain-spattered windows at leafless trees, lifeless gardens and leaden skies. They assume no-one will want to buy their property while it’s looking like that, not when its so beautiful in spring and summer. No they’ll wait until spring and besides they can’t really be bothered presenting the place on a rainy Sunday when they’d rather be watching the footy on Sky. “No-one will be out looking in weather like this.”

SOLD

Meanwhile cash winter buyers are out there looking and buying. In spring they know they will have more to pick and choose from but life goes on and here in winter there are fewer properties on the market that suit them. Winter buyers compete with other buyers who are arriving daily, especially this year from Christchurch. Winter buyers are more prepared, more focused, less fussy and keener to do business now. Even the less desirable properties get a dance. Shortage of supply drives the price up so winter sellers do well. There are few things more appealing on a winters day than a warm welcoming property filled with the aroma of fresh coffee and scones, especially when its raining. If such a property says ‘HOME’ on a rainy day, it’ll be great on ANY day. Later, spring brings a flood of properties onto the market. Buyers relax and enjoy the luxury of leverage and choice. The only place the price can go is down and a looming Christmas puts further pressure on sellers. Buyers love to haggle in the spring market. Jeremy Matthews


E

ven though life happens and real estate decisions are made throughout the year, markets follow a rhythm connected to the seasons.

Selling well is about timing and the best time to sell is on a market with little competition. There are always buyers in any market and when buyers compete for a property its market value rises. •

September to December is a peak spring market.

Mid December to Jan is the quiet Christmas holidays.

Mid January to April is peak summer/autumn market.

May to August sees a quieter winter market.

It takes about 14 days to prepare a property and its marketing campaign. Ad an average 45 days to sell a residential property in Nelson. (NB: The first 14-21 days are the premium days.) Ad a further 30 days between the sale confirmation day when the deposit is paid and Settlement day when the new owners move in. That’s a 89 day total, nearly three months from start to finishing a successful sale. Finding the next property is a different matter and may be happening concurrently with the sale of the existing home. But successful sellers factor about 89 days into their real estate plans when considering the local market rhythm. To become cash buyers in a spring market, existing properties should be on the market now, in winter. Winter sellers enjoy less competition from other properties and more competition from among buyers. Winter sellers arrive on the spring market cashed-up and ready with time to be in their new home for the Christmas holidays and the start of the new school year. Jeremy Matthews

Jeremy Matthews Residential Sales Specialist & Auctioneer ph: mob: email:

03 546 9455 0274 379 485 jeremy.matthews@bayleys.co.nz

SOLD!!


114 Hortons Rd Ruby Bay. Sold above $765,000

95 Landsdown Rd. Sold above $795,000

46 Quebec Rd. Sold above $428,000

118 Princes Dr. Above $605,000

358 Hardy St. above 1,050,000

48 Brougham St. above $750,000

118 Lord Rutherford Rd.

Every one of the above Vendors employed Bayley’s uniquely successful marketing programme and negotiating acumen to sell their properties for the best possible price. For results like theirs call Jeremy Matthews today.

Profile for Jeremy Matthews

...at your place 3  

...at your place is the newsletter of Jeremy Matthews. Residential Sales and Auctioneer for Bayleys Real Estate. Nelson. NZ

...at your place 3  

...at your place is the newsletter of Jeremy Matthews. Residential Sales and Auctioneer for Bayleys Real Estate. Nelson. NZ

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