It is difficult to pinpoint any one reason for the decreases we see across the board this month. To be fair, they are probably caused by an accumulation of factors, not least of which is a significant reduction in business confidence that is now approaching almost 50%. Even just the reporting of this fact in the daily media erodes confidence, even if there is little tangible reason – a typical knee-jerk reaction on the part of business to a Labour government? Who knows?
However, it is more likely that changes to the Loan to Value Ratio (LVR) i.e. the need for a larger deposit, the discussion around anti money-laundering legislation, and the simple fact that the last upward trend in the residential real estate market lasted way longer than the usual cyclic movement, have likely played their part, too.
A fall in median prices usually runs parallel to sales volumes, and the stats this month confirm this trend. What the numbers don’t describe, though, is the belief, held by our daily observation of the market, that these decreases are purely statistical. We don’t believe that good properties have dropped in price. What we observe is that property values are simply standing still. This stability is probably a good thing for both buyers and sellers.
The one thing that hasn’t stood still is Ray White Damerell Group – quite the opposite. Over the past month, our company has seen a sharp upturn in both volumes and market share (see below for details) – proof, if any was needed, that we are becoming the preferred option for the discerning vendor in Greater Ponsonby.
On the flip side, companies and individual licensees who have little investment in knowledge or skill, and who rely upon a buoyant market to do their job for them, are currently doing it tough, with two real estate firms in this area closing within the last month, and we anticipate further closures.
As the old saying goes: When the going gets tough…