Market Update from Jim Davis, Harcourts South Island Regional Manager
REINZ have just released the latest sales data for our Christchurch market relating to February 2018.
The results show some interesting aspects that, if taken out of context, could be misinterpreted.
The raw figures indicate there were 554 residential sales in Christchurch in February 2018, $453,000 was the median sale value and 47 days was the average time it took each property to sell.
In comparison February 2017 sales statistics were 540 residential sales, $452,000 was the median sale value, with an average sale time of 37 days from list date to sale date.
From these figures we can see that sales volumes have been very consistent year-on-year 554 vs 540 and the medium sale price is virtually identical as well.
These two indices support what I have been saying for several months now, our local market is very steady and has favoured neither buyers or sellers for quite some time.
Prices have remained remarkably steady with minor monthly fluctuations recorded depending on sales activity for that specific month.
We currently have a good steady stable Christchurch market, sitting between the peak of the economic boom of 2007 and the lows recorded following the quakes in 2010/11.
What is interesting is that the days to sell has lengthened in the past year from 37 to 47 days on average. Some commentators will no doubt say this is a result of a slowing market or some such other reason they have heard about. Whereas I think it has a far simpler explanation and it relates more to a perceived change in the best sale method by the public and perhaps some of the consultants here in Christchurch.
When you factor in that fewer vendors have been choosing to auction in recent times, then the result has been that property transactions have taken longer to conclude. Quite simply if your preferred property is not in an auction campaign that requires a buyer to “act”, then buyers are free to submit conditional offers, allowing themselves more time to do their due diligence and so the average time to sell gets longer. The property sales are still happening, just the average time to sale is extended.
I don’t believe the change from 37 to 47 days represents anything more than the fact that more properties are in the “conditional sale” period now than there has been previously.
Why then would this be happening?
Once again, I believe there is a simple answer, the owners selling property have been used to a stronger more confident market over recent years and as the effects of Government and banking policy have slowed down (but not stifled) market activity, potential vendors have perceived that there might be a better alternative to auction.
There is no doubt that Harcourts as a company and a brand promote and prefer auction as the best and fairest method of sale.
After all – buyers get to see who else is interested on the day, who else is bidding and as a buyer you can decide whether you are prepared to pay a little bit more than the next person or not. It is, I believe, a lot fairer than the ‘closed offers’ one chance’ scenario that might otherwise prevail with other methods of sale.
As a ‘cash buyer’ you get the first opportunity to bid on and buy your preferred home, while from the vendor’s perspective you get the opportunity to present your property to the ‘cash buyers’ first and achieve a confirmed sale on the terms that you prefer.
If there are no cash buyers on the day, then all interested parties now get the opportunity to make an offer immediately ‘after auction’ be it conditional or cash.
What could be fairer? This is the reason that so many auction properties are signed up in the days immediately following the nominated auction date. In the trade we call this “stage three”.
From a vendor’s perspective an auction is as much about the process, as it is about the price. The process to achieve the best possible price, in the best possible time frame.
I would advise anyone looking to sell to talk to their local Harcourts consultant about the auction method of sale.
It’s fair, it’s transparent, it allows some control, it will generate the desired result in most instances compared to other methods and I believe there is an economic benefit (but that’s another story).
Yes – it costs a little more, but I firmly believe the benefits significantly out way the perceived disadvantages.
Talk to your one of our consultants today – there is a reason they are among the best at this method of sale.