What's it Worth?

There are a number of ways to understand the value of your property ranging from free to a few hundred dollars. You can go it alone and compare properties with similar rating valuations and features in the area that have sold recently, you can get in touch with your local real estate agent for an appraisal, purchase an E-valuer or a Full Market Valuation or both. A combination of a few of these options can give you a good indication of what your property will likely sell for.

Any Renovations or Additions?

Two houses in the same location, of similar size and with the same reserve price, can sell for a big difference in value. It begs the question, how do you add the most value to a home, and what value do high specifications add in today’s property market?

It may be worth spending more on “high spec” features for homes at the high end of the market, but for more modest priced homes you have to be careful not to over-capitalise, or overspend on improvements that won’t increase the value of your home.

Whether or not “high specification” adds value differs between suburbs and value ranges because of the demographics of an area. Different buyers value different things.

Spending money on kitchens and bathrooms will usually add value to a home. But if you want to know whether to spend $10,000 or $30,000 on your bathroom makeover you need to consider the overall value and location of your home. On a higher priced property you are likely to add at least the value of a ‘high spec’ bathroom but at the lower end then you might be better to spend $10,000 instead. A modern kitchen that doesn’t break the bank will still add value to a home. But if you spend $40,000 on a kitchen in a modest home, you may not get the same value back.

Relaying carpet or replacing the roof won’t add value to your property, carpets are a chattel and roofs fall under repairs and maintenance. A roof is expected to be functional and do its job. You will lose money if leaks otherwise it is just a cost. You wouldn’t replace a roof unless it’s needed. As long as the roof of the dwelling is well maintained, functional and in reasonable condition the value will not be impacted by the roof.

Landscaping can add a significant amount of value a property. However it may not be a direct relationship between value spent and value added. The added value of well-presented landscaping is generally on the overall saleability of a home through increased street appeal/utility. It is a great way to get potential purchasers through your home on open homes.

In regards to how much should be spent on landscaping, again it depends on the overall value level and type of property. The market expectation of the level of landscaping in a high value suburb is significantly greater than that of a lower value suburb.

The nature of the property can also dictate the nature of the landscaping and site development utilised. For example if you own a high end character villa you ideally want to keep that timber picket fence out front rather than replace it with something more modern.

Property owners should consider the nature of their property and the wider neighbourhood before commencing any major landscaping works.

Another example of this could be replacing timber joinery in a villa/character bungalow with modern aluminium joinery as this does not enhance the character and detracts from the value.

Garaging is another element that is also very dependent on the locality of the property. In areas which have larger land sites and generally more space, a new garage may not add much in value. However, in inner city suburbs where land is at a premium and the lots are much smaller and off street parking is scarce, a garage could add a significant amount of value to your property.

If you have done significant work it might be worth investing in a Full Market Valuation to get an understanding of the worth of your property.

Valuation Options

Rating Valuation

  • only updated every three years for the purpose of your local council
  • established using a mass appraisal process
  • often used when buying and selling as an indicative price.

E-valuer

  • an instant, online estimate of the current market value for a property
  • based on recent, nearby comparable sales
  • often used for establishing the current value when making an offer or wanting to sell your property.

A Full Market Valuation is:

  • completed by a Registered Valuer
  • based upon a full inspection of your property as well as related sales in the area being analysed
  • typically used for a variety of reasons, including securing finance when buying

For more information visit Valuations and Reports

Understanding the Market

Deciding the right time to buy or sell doesn’t have to be a guessing game.  By getting to know the market as it stands, as well as the general trends that have long been established, your end goal, be it buying or selling, can hopefully be achieved within your required timeframe. 

Buyers’ vs sellers’ market

One thing to look at when you decide to enter into the property market is whether your area is currently a buyers’ market or a sellers’ market.

In simple terms a buyers’ market benefits the people looking to buy a property. Generally, there are more properties on the market than buyers. Sellers are essentially vying for their attention as sales are harder to come by in this environment. Buyers can benefit through increased negotiations over price as well having more choice and less competition regarding the properties they are looking at.

A seller’s market on the other hand is essentially the opposite. There are multiple buyers looking and fewer properties for sale. This generally forces more competition and can increase sale prices as a result.

If you are selling and buying at the same time, it can be a bit of a balancing act depending on the current market environment. For example, if house prices are generally on the rise this can be great for when you sell. But it also means you may be forced to pay extra, or over the odds, for a property when you buy. Reversely, if house prices are low you may get a good deal buying but when you come to sell you own, it may not reach your full expectations.

You can get an idea of how the market is playing out by keeping an eye on our latest monthly value statistics and market commentary. You can also register with us to receive them as part of our email newsletter.

The seasonal impact

Across the seasons, you will generally encounter different times for when it is most affective to buy and sell.

Although each year can differ depending on the economic climate, generally speaking the autumn and spring seasons are when most of the property sales occur. Even what seem like the smallest things, like extra sunlight and warmth, can affect how a house is viewed. As a result these seasons are more conducive to properties changing hands. Summer would seem like a good time also; however, a lot of people in the market can buy or sell before or after, avoiding the busy Christmas and New Year period.

Other factors to consider

There are many other factors you need to consider when you decide to buy or sell a property. Regardless of market conditions and current trends, you need to look at your personal circumstances. If you need to sell by a certain time for example, you don’t have a choice. However, perhaps trying to sell earlier and having a later settlement date, instead of starting to sell close to any deadline date would be a better option.

Some other important factors that you need to consider include:

Economic climate – is the current climate meaning people are holding onto their money?

Interest rates – are they low and making buying an easier prospect for you?

Neighbourhood developments – is a nearby eyesore going to affect whether you buy a property, or how does it impact you when selling? Or is something like a motorway extension or an airport expansion going to affect your home?

Defining features of your property – is there something that sets your property apart from ones nearby? Or, is a characteristic of your property highly sought after at the moment?


Latest News & Articles

 

We kiwis love giving something a go ourselves to save some dosh. “I sold our last place myself in 2 weeks and saved $35 grand in commission” is often heard when telling others you’re thinking of selling. But for every story like this, you can bet your bottom dollar that there’s a long trail of untold stories featuring wasted advertising spend, lengthy delays, unrealised pricing potential and disappointment on both sides of the equation.

Unless you have extensive experience selling properties, enlisting the services of a real estate agent to sell your property is recommended. Why? It’s often our biggest asset. It deserves a professional approach.
How to choose your real estate agent:

Choosing who sells your property should be a decision that’s well researched. This isn’t the time to call some-one just because you’ve seen a billboard or keep getting their flyers in your letterbox.

We spoke recently with Nicki Cruickshank and Billy Bell of Tommy’s Real Estate, two well-regarded Wellington real estate professionals who provide some insider tips on how to pick the right agent to sell your home. Cruickshank has been in the game for 13 years, and is a go-to media commentator. She’s seen the market through every single stage and has sold hundreds of homes so she knows what she’s talking about! Bell is newer to the game but has an outstanding track record already, is extremely responsive and noted for his social media skills.

1. Word of mouth

Ask. Just ask. Getting a personal recommendation should be your first step to finding a real estate sales agent. Cruickshank comments:

“Selling a home involves a lot of trust in us as agents. If we deliver a cost-efficient marketing campaign, secure multiple offers; manage everything professionally and in an extremely responsive way to achieve a great price - the personal recommendations that flow from that are the best form of advertising I could ever hope for. It’s credible, it’s proven, and it’s how I secure 80% of my listings”

Bell advises to dig deeper too: “Don’t just ask who they’d recommend, ask why. What specifically made them happy to recommend that agent? Ask if there were any tricky parts of negotiations and how they were overcome. Ask if they thought the marketing spend was justified”.

2. Look local

Beyond personal recommendations, take note of local reported sales and who sold them. Check out the current listings in your area - who is selling them? But more importantly, track what happens: do they sell? Do they get taken off the market? Do they get relisted by someone else?

You want an agent who is likely to have a pool of prospects on tap that have missed out on other properties. The right agent for your property might be based in another area, but have a proven track record in the location you’re selling.

3. Attend their open homes

Once you’ve got a few potential real estate agents in mind, go to some of their Open Homes and mystery shop them! See how they sell someone else’s home before you let them sell yours. Observe their selling techniques; see how it feels as one of their ‘prospective purchasers’.

Watch how they welcome people and talk to them: are they polite and helpful or detached, indifferent or rude? Do they ensure all attendees have provided contact details? Do you actually hear from them after the Open Home? If they’ve had to leave a message for you, do they ever follow up? Do you get confirmation of any questions raised?

Cruickshank comments: “Agents get paid by the vendor to secure the best price possible. Achieving that requires professional relationship management and sales skills - you want prospective purchasers to feel completely welcome, that the whole process is being managed professionally in a responsive way”. Cruickshank also notes that discretion should be guaranteed: “If some-one asks why the home is being sold, they’re often fishing for information to use in negotiations. If you ask this question and get told something other than ‘the owners are relocating’, you shouldn’t hire them”.

4. Test their knowledge

Take it one step further ask some specific questions about the property - either at the Open Home or after the fact. That will give you an idea of how much the agent has bothered to learn about the house, their level of professionalism and commitment to the sale.

Pay attention to remarks they make to yourself and other Open Home attendees. Are they acting in the best interests of the vendor? Because if you select them as your agent, that vendor will be you.

5. Check the real estate agent’s sales record

Look at the sales records of the agents you’re considering. It’s not just about how many listings they have - that’s only half the story. Look into their sales history and actively check that the agent is actually selling those properties.

6. Look at how fast the agent sells a property

Do some further research and see if any patterns emerge: Take note of how long their properties are on the market.

7. Short-list the potential agents

Once you have short-listed a handful of agents, call them. A few won’t call back, which will straight away narrow the list further and you may decide over the phone that a few aren’t quite what you’re looking for. Busy agents may have a message service - that’s fine as long as you do hear back within a reasonable timeframe.

8. How do you want them to work?

Before you make the calls, determine what kind of client you want to be and communicate that to the agent to see if they’re able to work with your request.

For example: do you want to be kept updated at every step along the way, or do you want to have as little to do with the selling process as possible and don’t need the agent to run every single detail past you?

9. Get an appraisal

Of the remaining potential agents, request an appraisal. An appraisal is an estimated selling price for the property and it should be free.
The results may vary, so make sure that the agent can justify the figure they are presenting to you. Some may come back with a much higher price but this doesn’t necessarily make them the best agent because the price they’ve set may be completely unattainable, which only sets you up for unrealistic expectations and disappointment. Reference the appraisal figure against an E-Valuer report on QV.co.nz and pay attention to the agents reasons for their appraisal figure.

10. Presentation, Presentation, Presentation

The appraisal stage will often create jobs for you! De-cluttering, gardening, storage, fix-it’s such as painting, carpeting and plumbing. A good agent should have contacts for these and possibly also have negotiated special rates. Who do they use for photography? What about property styling/home staging? Presentation costs can add up, so it’s definitely worth asking for recommendations and discounts.

11. Achieving the best possible price

Don’t be afraid to ask them questions about their selling technique. Will they auction the property or sell it by tender? Will there be expressions of interest? Do they recommend ‘buyer enquiry over’? Do they advertise without pricing? How often will they conduct open homes? Make sure you 100% understand all the options and don’t be afraid to question any industry terminology: if you’re unsure, ask.

Focus also on their advertising strategy: Do they incorporate digital components or just traditional advertising? Do they provide tracking of advertising spend? Can it be tweaked mid campaign? Which social media channels do they confidently use? Like their pages and follow their activity. Are they responsive? Which formats do they utilise? Just photos? Video? 3D models? Floor plans? Bell comments: “A smart social media marketing plan will utilise multiple creative approaches across multiple channels. I’m not just talking Facebook. Done well, it will put your home in front of a much wider audience, create opportunities for quality engagement with potential buyers and convert to many thousands of views on your property’s online listing. Anyone actively looking for property knows just how time consuming it can be - part of your agent’s job should be getting your property easily seen by your target audience in a place they’re already spending time. This can absolutely be achieved with the right targeting and creative approach. I know exactly how many people are attending my Open Homes directly as a result of social media campaigns - there’s a reason it’s a major part of my marketing campaigns: it works!”

12. Negotiate commissions

You can certainly haggle, just be wary that a lower commission should definitely not be your main selection criteria. A great agent with a proven track record in achieving the best prices possible is worth every percentage. Remember the old saying: ‘If you pay peanuts, you’ll get monkeys’.

Cruickshank comments: “If the agent is willing to reduce commission easily, it could be a sign of poor negotiation skills. Just imagine them doing the same when negotiating on your behalf in the property sale! Poor negotiators earning lower commissions will also need to be moving properties faster, which means less opportunity to achieve the best price on your property”.

12. Trust your instinct

Finally, don’t ignore your gut feeling. If you have a particularly good or bad feeling about an agent, don’t discard that - it’s just as valid as other selection criteria when making your final decision. Cruickshank explains: “Real estate is all about trust. Great agents have in inherently. Yes, presentation and behaviour helps, but actually it’s all about how they naturally are as people. It’s their approach, the way they communicate, their transparency and honesty with you. It’s very much something that is earned through demonstrable behaviour, which is why personal recommendations are so important”.

The right agent can sell your home faster, with less stress and for the best price. You have to do some research and invest some time when choosing the right agent for you and your property, but that effort is so worth it to know you’ve made the right decision for what is often your biggest capital asset. Good luck and don’t forget to check out our guide for presenting your home for sale.

Our Head of Research, Nick Goodall takes you through the latest trends and new developments in the NZ property market this month.
 
Topics covered in this months short video include:
  • how the election and other factors are affecting different buyer types;
  • and where the market is likely to be headed.
 
 
Enjoy the video, and please do subscribe to us on YouTube so you won't miss the next ones.
 
 
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The NPC of the property market

Friday, 8 September 2017

Nick Goodall, Senior Research Analyst, CoreLogic

 
Thanks to the weird and wonderful political world of the upcoming General Election, NZ property market commentary is bulging at the seams, so this month I’m taking a more light-hearted look at our property values across the country.
 
Other than delving into property insights, my other big passion is sports. Lately, I’ve been enjoying the Mitre 10 Cup, the National Provincial Championship (NPC) for our beloved national sport of Rugby. It’s renowned for stirring up the passion of home town team support, with the playing squads often filled with locally based players, many of whom earn most of their living by working other jobs. 
 
I’m certainly right into it -  probably helped by the fact that my team, the mighty Northland Taniwha, are actually doing quite well with two wins from three, but to be fair: I’ve stuck with them in the bad times too (which have been far too frequent, just quietly!)
 
So, combining rugby and property - how have each of our provinces performed in their season equivalent. Who’s the Canterbury rugby team, the juggernaut? Who’s the Waikato equivalent, a little bit inconsistent in their growth? Who’s this year’s Southland, a little disappointing and lacking in recent form? And of course who’s this year’s Northland, the surprise package?
 
To those who don’t share my love of Provincial Rugby, don’t fret: I’ll still cover off our key market metrics, so keep on reading.
 
Firstly let’s look at the key overall stats. According to the QV House Price Index stats for August, nationwide values slowed even further (now at only 0.1% monthly growth). Annual growth was 4.8% - the lowest rate since August 2012. 
 
Auckland annual value growth is now only 2.8%, with quarterly growth now in the negatives (-0.2%). Wellington also saw a drop in the last three months (-0.4%), and the negative trend is still evident in Christchurch too (-0.4%). 
 
Tauranga maintained relatively strong growth of 1.7% quarterly and 10% annual growth, and Hamilton has seen a mini-resurgence of values (up 1.4% quarterly), although the annual figure does remain at 5%. In Dunedin there wasn’t much change, with 0.5% quarterly change and the annual rate holding steady at 13%.
 
 
So then, on to our NPC (National Property Championship) analysis of recent property market activity:
 
Of course the data isn’t perfectly grouped to match the Rugby version but it’s not too different. Using the QV House Price Index we have 14 grouped regions/cities and now that we’re pretty much at the end of the most recent growth cycle we’ll use the growth over that cycle as our measure to compare between the provinces. So the percentage change in value since January 2015, up to to September 2017. And to keep it interesting we’ll split the ‘season’ (growth phase of 32 months) in half to track the early starters and strong finishers.
 
Manukau (our proxy for Counties-Manukau) was the strongest in the first half of the period analysed, and as with the rest of the Auckland area this was in fact a continuation of growth since 2012. 29.0% growth from 1 Jan 2015 to 1 May 2016 (half way) gave it a strong lead on the chasing pack with North Shore (North Harbour in the Rugby) 5.7% behind and Bay of Plenty keeping the Aucklanders honest at 21.4%. Auckland City (Central) also saw 21.4% growth over this period, with Waikato a further 1.4% back on 20.0% growth over those first 16 months. So the big centres in the top half of the North Island were flexing their muscles, could they keep it up though and who was struggling?
 
Here’s the full table at the mid point (1 May 2016), with Canterbury lagging (the opposite to their Rugby team!) and Taranaki, Southland and Manawatu also struggling to find ‘form’.
 

 

 

Looking at Canterbury, it’s worth pointing out that the region was significantly affected by the 2010 and 2011 earthquakes which reduced property stock and increased demand in the short term as the rebuild got underway. This meant its property values grew out of cycle with most of the rest of NZ and by 2015, while most other areas saw little value growth, it had appreciated by almost 30%.
 
Back to the competition then and Auckland’s momentum had been halted in the back end of the ‘season’. The outstanding first half performance couldn’t be maintained, yet in the Bay of Plenty things only got stronger with a final ‘points haul’ of 49.3% growth over the full 32 months. Waikato also stayed strong but a few points back on 43.9% while my beloved Northland takes out third with 42.9% growth over the period. Manukau was slightly behind on 42.7%, while Auckland City dropped back to seventh and North Shore to ninth.
 
Manawatu found some form but couldn’t get out of the bottom four, while Southland and Taranaki grew by less than 20% and poor old Canterbury stays rooted to the bottom of the table with only 6.1% increase over the entire period.
 
 
 
So there you have it!...
 
Bay of Plenty have been the property juggernaut, Manukau and the North Shore probably represent the inconsistent Waikato Rugby team, Canterbury are the Southland of the property market in the last few years, and maybe Northland or Hawke’s Bay (5th with 41.5%) are the surprise packages. A bit of fun and none of the really big guns winning out so that’s gotta be a good thing, right?! (Go the mighty Taniwha!). 
 
 

New Zealand Regional Maps:

 

 

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