What economists miss

Sunshine. It’s one factor economists don’t look at when they do their predictions, but I reckon it has a part to play in the housing market.

Over the past week I have been out talking to property people in Rotoura as part of a feature we are doing for the October issue of the NZ Property Investor Magazine. What has surprised me, a little, is how positive everyone is feeling.

Through winter, up until July or August things were pretty bleak in the market. Prices were down, properties weren’t selling and people were staying home.
Indeed three real estate offices have disappeared in the city this year – a true sign of how tough the market is.

Yet, the people we spoke to all told similar stories, that in the past few weeks there has been a real turnaround in sentiment and activity. (One even showed a graph supporting the view that the market had picked up a little, so it wasn’t just real estate sweet talk on show!)

More than one of them looked out the window and suggested that better weather and glorious sunshine were helping the market.

Sure things aren’t going gang-busters, but boy it is a lot more cheerful. A view which was interesting is that Rotorua has always been a popular place for property investors as it was affordable, didn’t have the big swings in house prices and generally investors could get good yields.

With characteristics like that you could argue that it will be one of the first places to attract the attention of buyers again as the market slowly gets to its feet.

If the sun is helping to make the Rotorua market more positive, one could expect that the same is happening elsewhere. I’d love to hear your thoughts, send them to thelandlord@landlords.co.nz

PS: We are looking at Rotorua as the NZ Property Investors Federation is holding its annual conference in the city at the end of the month. More details are at http://www.propertyconference.org.nz