2010: A Bumpy Ride or Tsunami?

The Real Estate Institute of New Zealand has just reported that sales of homes and residential property in January have plummeted to their lowest level in nearly two decades.

Brian Dalley, in his Market Blog, reports that while property sales appear to have screeched to a halt it’s just part of the cycle. So, what’s up with house sales on the North Shore?

Newspaper reports state that inaction by property investors anxious about John Key’s pronouncements on revising the tax structure for property investment has caused a pause in the market. And yet, on the North Shore house prices have increased from an average of $526, 500 in December to $535,500 in January, with sales levels about the same as last year at 249 homes sold. (see REINZ residential highlights-Jan 2010).

And wasn’t there a real surge in sales just before Christmas last year? Well, there was, but not really. Real Estate sales people were happy that the usual summer surge happened on the back of low interest rates and mortgagee sales but it was still no where near the volumes we had back in 2004 to 2007.

A Bumpy Ride

2010 is is going to be a bumpy ride, but it ain’t a tsunami. There’ll be more mortgagee sales and a few home owners cashing up to reduce debt due to redundancy or lower cash-flows from their small business.

But as I have previously reported there is an underlying shortage of homes on the North Shore, and the builders have started building again.

This year a well presented, well marketed home will sell well. You may need to be a little patient and a little smart to get the price you want, but keep your head and you will do well.

If you are looking at investment properties, look for positive cashflow- try a home and income. And haunt the mortgagee sales.

Be sure that when you buy a home for your family on the North Shore, it’s a sound investment- the North Shore is New Zealand’s lifestyle city!