Stay or Sell
- Written by
- Dyani Van Basten Batenburg
The housing conundrum of now
There’s no denying it, the housing market has gone berserkers– contrary to what many of us anticipated way back in March. According to REINZ latest residential property data, the median house prices across New Zealand increased by 19.8% from $605,000 in October 2019 to a new record median high of$725,000 in October 2020. With no definitive housing handbrake in the foreseeable future – what to do? Sell up and cash in, or stay put and make the most of what you’ve got? There are no cut and dry answers, but there are benefits to be had both sides of the coin, say housing experts.
Sellers don’t settle
If you are planning on ditching your pad and moving onto a new place or project, don’t speed through the selling process, advises Simon Short, Property Broker’s Waikato and Bay of Plenty regional manager. “Because of the lack of supply out there and the huge buyer demand, we’re seeing many savvy buyers jumping in early to secure a sale a head of an auction or just a few days into a property being advertised – so they knock out the competition,” he says. “But our advice to vendors is to wait – don’t settle for that first offer– let your campaign run at least a couple of weeks. Bring in some buyer competition to secure the best price. “We had a recent case where a preauction offer was turned down – the prospective buyer stipulated he couldn’t go any higher – the property then went to auction and sold for an additional $160K over the initial offer to the same underbidder.”
Buyers don’t expect a New Year drop
Traditionally speaking, property values in New Zealand have appreciated year-on-year – very rarely have they known to retract. And, part of that is because we’re a globally attractive country – NZ ink is pretty powerful in the property stakes. Thus, a future stagnant –or retracting – market is unlikely, says Simon. So, buyers need to be comfortable at the levels they’re purchasing to. “I would be very surprised if interest rates will ever get back to the levels they used to be simply because our debt levels and the requirements that drive interest levels to go up or down has been influenced greatly by COVID. And, the fact is that the global trend in interest rates is around negative territory,” he says. “Purchasers need to consider their ability to service their loans if they have pushed themselves to pay a premium to secure a property. Serviceability is the more critical aspect if employment does change in 2021.”
Homemakers be savvy with your spruce up
If you’re steering clear of selling up, making the most of your property’s footprint is achievable without blowing the budget, says Jo Peterson, property manager at Goodwood Renovations. “Stepping back and seeing your property in a new light – away from the bright lights of a seller’s market –never goes amiss. You can transform a whole house inside and out, for often much less than what you think so long as you seek the right advice and expertise,” she says. “It’s fairly minor works to take out a non-loadbearing wall between your kitchen and dining to open up that space. Or, to replace your dining room windows with a set of French doors to extend living out onto the deck. Building a deck – given it’s under 1.5metresabove ground – it can be built without council consent, but it will still require compliant balustrade if it’s over a metre.”One of the most cost-effective ways you can freshen up a main bathroom or ensuite is by replacing the fixtures, says Jo. “Sourcing affordable, modern fixtures isn’t hard to do nowadays –the likes of Placemakers, Bunnings and Mitre10 all provide great selections, with warranties,” she says. “So long as you’re not planning on moving pipework (often pipes are where they are for a reason),you can transform a bathroom with tapware and fixtures. Even acrylic showers have come a long way – they are much funkier and can be more affordable than tiling.”
House hunters keep your eyes peeled
If you’re headed for a new home, stay on the lookout for potential property pitfalls in homes you’re perusing, advises Jo. “Do your due diligence and do read reports. Look out for major cracking in walls and ceilings. Often water damage down the inside wall of a bathroom will extend to the floor –extensive damage you won’t always see with the naked eye. What’s the condition of the roof and gutters –will these need replacing? Is the space accessible, well ventilated, has all the work been consented? Safeguard yourself from potentially huge extra costs to bring it up to code down the track.”