It’s a question that many homeowners are asking themselves right now but unfortunately, it’s more complicated than a one-word answer. As you’ll see in this article, there are a number of things to consider when selling your property to ensure you’re successful, even in a turbulent market.
With the events of the past few years, the New Zealand housing market has been fluctuating a lot, leaving many homeowners feeling uneasy. Selling a house is daunting enough without the threat of a market crash or a recession but thankfully, there are ways to overcome this. In this article, we unpack everything you need to know about selling a property in an unstable economy so that you can figure out if the time is right for you.
The threat of a housing market crash
There’s no point beating around the bush, the housing market is in real danger and it is quite possible that prices will continue to drop. In fact, The Reserve Bank has said there’s a chance house prices could drop by 20% at any given moment and there’s no way of predicting it. That might feel like a big downturn and it is, but as it happens, the prices haven’t yet dropped below what they were in 2021, so it’s not as dire as you might have thought.
With all the media hype and discussion around this topic, it’s easy to hear the word ‘crisis’ and start panicking, but you don’t need to worry. Most sellers are getting more for their homes than they originally paid for them, which is still a success. That means now could be the best time to sell, before prices could spiral out of control. At least right now, you can assess the market rates and know what to expect, but in six months or more, the prices could plummet, or they could go up. Remember, as long as your home sells for a profit, it’s still worth it, and right now could be your best window of opportunity.
Selling in a buyer’s market
A buyer’s market is when there are more properties available than people to buy them, meaning demand and prices are lower. In these situations, buyers tend to have more negotiating power and can make offers below what sellers are hoping to get, or with additional conditions. In 2022, New Zealand has seen a shift from a seller’s market to a buyer’s market and that’s one of the reasons the average house price has dropped. But don’t stress — you can still sell your house for a profit and then you’ll be in an ideal position to buy your next property. As long as your initial house sells for a gain, you can then go on to buy the next one for a lower price than what you might have paid for it a year ago.
It’s also worth noting that in a buyer’s market, since your buyers have more properties to choose from, it’s a good idea to invest a little extra effort into sprucing your property up. If you take the time to clean, stage, and fix up small issues, your prospective buyers are far more likely to be interested and willing to give a higher offer. A few top tips from our real estate experts are to declutter, deep clean, and tidy up the landscaping so that buyers have a better first impression.
Increased value of houses
With all the fear and uncertainty surrounding the market right now, it will comfort you to know that the reality of it isn’t so bleak. In fact, most houses in New Zealand have increased in value by 15% since 2020 while prices have only fallen by 4%, so far. In other words, many houses are still being sold at a large profit.
It’s easy to compare to the lofty property prices of 2021, which saw record-breaking prices around the country, but in reality, prices now are still relatively high. Although the national average of house prices topped $1 million last year, don't let the 4% drop fool you, you can still make a significant return. After all, 4% off $1 million would still bring in $960,000. As there’s no knowing how far the prices will fall, selling now for these 2022 prices could be a wise decision.
Selling for the right house price
Now that you know the market situation, there’s one more essential step to take. In a complicated market, it’s important to know how much to list your house for, in order to receive favourable offers. This can be a challenge because house prices differ greatly depending on location, style, size, condition, and the local market which can be a lot to keep track of. If you price your house too low, you might be missing out on thousands of dollars, but on the other hand, if you price it too high, it might be on the market for too long and get no viable offers. So if you get expert advice before pricing your house, you’re more likely to get competitive offers and sell sooner.
For instance, this homeowner in Wellington sold her house for $1.3 million even though she only expected it to sell for $1.1 million. This is a great example of how pricing your home realistically with the local market in mind can still deliver a result worth celebrating.
The best place to start is to get a professional appraisal to fully understand where your house sits in the market and what is a reasonable price to expect for it. This gives you all the necessary information you need to decide on a price and weigh up if the gain is worth it.
If you need some reassurance to sell your house, why not contact the team at McDonald Real Estate who can help you understand the pros and cons. We know the local market inside and out and can guide you through the process. A free no-obligation appraisal is the perfect starting point.
