Harcourts' sales down over 30%

Commenting on the company’s February statistics, Thomson says the volume of written sales in its regions last month declined by an average of 32% compared to February 2007. In addition the amount of property on hand in February was up on the same month last year, by between 9% in the northern regions, to 57% in Christchurch.

“For a wide range of reasons people still need to move,” he says. “Quality, well priced, well presented and marketed homes are still in demand and property is still a good long-term investment option.

“In fact, as we know from history, many of the best gains in real estate are made by counter-cyclical investors with long-term investment strategies.”

BNZ chief economist Tony Alexander agrees, saying, “The professional long-term investors who focus on yield will do some canny deals in the dark depths of winter”.

Many people are trying to sell now, says Alexander, and will still be trying to sell come winter. He says buyers are seeing housing affordability improving at the moment and “once interest rates fall later this year they will come back out of the woodwork and secure the home they have been seeking with decreasing optimism for the past four years”.

Thomson says sellers should be mindful of the concept of selling and buying on the same market.
“Sellers who are buying another property need to understand that while they may not get the dream price they had hoped for, the property they want to buy is unlikely to achieve a dream price either. As long as they complete both transactions in the same market their buying power will remain the same.”

Meanwhile, it’s ‘business as usual’ for buyers, he says.

“As always, buyers should clarify what their financial position enables them to spend and continue to actively look at property as the buy of a lifetime could be on the market this week, but if they don’t keep looking and they’re not prepared, they will miss out.”

The “housing losers” in this cycle, says Alexander, will be “manifold; and include those who may have purchased in the past one to three years with high debt they have not reduced, who are facing a jump in their fixed rate financing of perhaps 2%”.