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The property market has cooled, so it is time to adjust your price expectations, says real estate agent, Martin Dunn of City Sales. What makes it worse in 2018, adds Martin, is that vendors don't seem to have noticed that the world is in the midst of political turmoil, which inevitably affects New Zealand's property market.
Auckland will bounce back, he says. It just depends how soon you need to sell. If it's now, or the next six months to a year, you might have to adjust your price expectations. Martin cites the example of the Global Financial Crisis where the average house price dropped from $600,000 to $570,000, but vendors were still expecting $685,000. The market did eventually recover. But, for the short term, it was difficult to sell at the previous high.
Dunn specialises in the apartment market, where vendors are expecting $10,000 per square metre on their properties. Yet most apartments are selling for less than that, and some for as little as $6000 to $7000 a square metre. Dunn says vendors will have to temper their price expectations "big time", although eventually the pent-up demand and shortage of homes will catch up in Auckland.
The cooling market could mean $100,000 less on a $1 million suburban property, so vendors do need to be looking at what has happened in their market over the past six weeks, not six months. Also, the banks aren't helping matters by making it hard for borrowers, especially investors.
Most real estate agents are saying vendors are beginning to understand that their price expectations do need to be modified, saying, we have had years, and years, and years of massive capital gain. If you have owned property in that time you have been very lucky with the growth.