After a grueling four-weeks long level-4 lockdown, New Zealand’s real estate practitioners can now say, the night is over. But the night was tough and ruthless. During the lockdown, residential property sales went down -78.5% according to Bindi Norwell, Chief Executive at REINZ. Tension had gripped the market and few people were willing to transact via non-traditional channels – cyberspace. Fortunately, prices held steady. The National Median price went up 17.2% with only a few regions like Otago and Waikato dipping.
If you are venturing into property sales, know this; victory belongs to the daring. CJ Ratwatte, a real estate professional in Auckland suggests that “It’s a great time to set yourself up for the next boom cycle.” Here’s a five-part recipe on how you can land the best deals.
Learn as much as possible about property sales and the market
When you are in business, information is currency. It helps you make better decisions, forecast and zero in on the best deals. This calls for you to fold your sleeves, get down and fish for first-hand data, or mine the internet through property companies. As CJ puts it, “it’s just about researching the market and pulling the trigger.”
So what kind of information should you be most concerned about?
- Look at recent property sales in the desired location, and understand the price trends.
- Look at the listings (property inventory) and pay keen attention to new builds.
- Dig in and find out the average mortgage rates.
- Find out about flipping activity in the region.
- Check out if there were many homes in the area at the brink of mortgagee sale before the COVID-19 crisis.
As CJ further elaborates that “the lack of the right information can cost you a lot of money, or at least would have you walk away leaving money on the table.”
Get help from brokers, agents, and lawyers
It’s hard to get the information above by searching on the internet or by doing a personal survey. Or at least it would take you aeons, to get, compile and make sense out of it. It’s better, and more practical, to surround yourself with a network of trusted experts.
CJ states, “a good agent is worth his weight in gold., is something a very successful investor once said to me.” Mortgage brokers will inform you of mortgage trends and property sales. Lawyers, on the other hand, will fill you in on the mortgagee sale trends in the region plus equip you with insight on legalities to look out for.
The opportunities ahead are vast. But you can only disentangle them through information and sound advice.
Know that there are opportunities in the horizon
In the opener, we mentioned that victory belongs to the daring. When penning these words, St. Thomas Aquinas mentioned something vital, a daring spirit is founded in hope.
You’ve got to have hope that the market will resurge and there are killer deals out there waiting for you.
But this isn’t blind hope. Market indicators and business leaders in New Zealand’s property scene have predicted a post-COVID-19 boom.
Transactions may have dipped during the lockdown. However, according to Norwell of REINZ, “There was a lot of activity still – people were still searching, listing their properties.”
There’s confidence in the market and this is not without good reason. For starters, unlike the 2008-09 financial downturn, “banks are supporting the market rather than pulling back from it.” This was said by Core logic’s senior property economist Kelvin Davidson.
The markets are responding to these moves. Property equities such as Goodman Property Trust (NZX: GMT), Investore Property Limited (NZX: IPL) and Argosy Property Limited (NZX: ARG) surged by 9.55%, 6% and 15.5% respectively in the period between March and late April 2020.
On the residential front, CJ notes, “we are seeing an influx of buyer activity at the moment. There are always people transacting real estate because people make decisions based on their life and not the market.”
Define what you want
When you are looking for property sales based on your life circumstances, not the market, it is crucial to define what you want. Be clear on the following:
- What you can afford.
- The purpose of the buy.
- Your future needs.
- The location and features you must have.
- Who’s handling the repairs (if there are any) and structure guarantees.
- The time you have to close the deal.
When you are clear on what you want, you will invest not just for now, but in a promising future.
Seize your opportunities
The above steps will help you land the best deals in property sales post-COVID-19 lockdown. Reach out to a real estate expert or a mortgage broker to help you make a move.