BAYLEYS REAL ESTATE LTD. MREINZ

issue Two 2011

IS MARKET CHANGE IN THE AIR?

NEW LISTINGS

LATEST SALES

EXPLODING THE MYTH!

“If I sell privately I’ll get more money by saving the agents commission.”

WHAT IS A DUTCH AUCTION?

FEATURE COMMENT

TESTIMONIALS Ingrid & Ashley Cooper

We met Jeremy three years ago while house-hunting. He was friendly, no pressure, always available, honest, and sympathetic with our relocating emotions. He is knowledgeable and businesslike without pretence or stuffiness, and to top it all, he's just a nice guy! Alison and Philip Innes-McLiesh

We've known Jeremy professionally for more than seven years and have consulted him about property matters on a number of occasions. We've found that he's knowledgeable of real estate within our region and always pleasant and cheerful. He provides an optimistic yet very realistic appraisal of property valuations and listens carefully to our needs, concerns and expectations. Rosemary and Phillipe Gauthier

Jeremy has proved himself to be reliable, honest and knowledgeable. He has helped us find and purchase a beautiful property while making the process straightforward and pleasant. We wouldn't hesitate to use him as our agent again. Raefe Murray

Jeremy's service is exemplary. He is naturally courteous and personable, but I particularly appreciated his honest and candid approach, his integrity and professionalism. Everything I asked of Jeremy was done in a timely manner, with a positive attitude and thus I found him very easy to work with. I have no hesitation in recommending his services to others.

M arket Into Its Recovery Phase We are seeing stronger evidence of recovery in the NZ real estate market with rising turnover, recovering prices, and licensed agents reporting rising interest

from first home buyers in particular. With interest rates low, the labour market improving, and consumer confidence rising, we expect these trends to continue this year, especially as awareness grows of the shortage we have long written about. Turnover The latest data from REINZ show that in seasonally adjusted terms nationwide dwelling turnover in April (that is the turnover change after making allowance for what usually happens in the movement from March to April) was 3%. That followed a 4% rise in March and means that in the past three months turnover was ahead almost 2% from the three months to January. In our opinion that means one can legitimately claim that turnover is rising. In fact, because the data include a 33% fall in the three months for the wider Canterbury Westland region there is a much stronger underlying nationwide rise underway than the near 2% growth implies.

...at your place is the newsletter of Jeremy Matthews Licensed Real Estate Agent REA-Act 2008 Disclaimer: Whilst all care has been taken to ensure accuracy in the preparation of the particulars contained herein, no warranty can be given for the above information.

Jeremy Matthews Residential Sales Specialist & Auctioneer ph: 03 546 9455 mob: 0274 379 485 email: jeremy.matthews@bayleys.co.nz

“To help Kiwi business-people and householders make informed financial decisions by discussing the economy in a language they can understand.”

“...one can legitimately claim that turnover is rising.”

“...a much stronger nationwide rise is on the way

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P rices Nationally The REINZ house price sales measure Adjusted for changes in the mix of

dwellings sold rose 1.1% in April after gaining 0.5% in March and 2.3% in February. Over the past three months prices on average were ahead 1.1% from the three months to January therefore we think it is reasonable to conclude that prices on average are rising. But just as Auckland dwelling sales are recovering firmly so too are their price gains tending to lead the pack with a rise of 2.3% over the past three months. We do not have regionally disaggregated stratified price measures as we do for sales, and even if we did we would emphasise the extreme care needed for such a price measure at the regional level be-cause even at the national level one can easily get 1% - 2% differences in the REINZ measure and the ultimately accurate measure which gets produced with a considerable lag by Quotable Value NZ.

P rices for Nelson. For your guide, we have put together a very simple set of graphs which at the regional level show how average prices have moved

when compared with the NZ-wide average since 1992. You are invited to draw your own view as to what the graphs mean. For instance, one can equally interpret a region showing a recent weakening of average prices versus the NZ average as either a sign that a catch-up is due or that it is losing favour.

Readers may find it useful in this context to compare these graphs with the more detailed projections of population contained in the Population section further on in this report for personal insight into whether a region may be offering “cheap” or “expensive” houses. Note that Auckland makes up one-third of the NZ housing market.

Jeremy Matthews Residential Sales Specialist & Auctioneer ph: 03 546 9455 mob: 0274 379 485 email: jeremy.matthews@bayleys.co.nz

D ays to Sell We use this measure mainly as a reality check on other measures and on a

standalone basis we advise caution as there is a bias introduced by vendors switching agents and the count resetting to zero for the house concerned. On average in April it took 43 days to sell a dwelling around New Zealand and this outcome was 7.7 days longer than average for April. March was 6.7 days longer than average. February 15.1 days. January 7 days. There is not an apparent improving trend yet in this measure we would suggest and that means one might want to treat the improv-ing monthly sales growth numbers with caution.

Extracts courtesy REINZ (The Real Estate Institute of New Zealand) and The Real Estate Overview. 30 May 2011 By Tony Alexander. Chief Economist. BNZ Disclaimer: Whilst all care has been taken to ensure accuracy in the preparation of the particulars contained herein, no warranty can be given for the above information.

An unassailable blue-chip site on the Port Hills above Tasman Bay with the treasury of Nelson’s famous waterfront are laid at your feet. For your pleasure a sweeping vista gathering everything between Tahunanui Beach and the Light House on the longest boulder-Bank on earth, each day heralded by magic sunrise, topped with every glorious sunset. Turn-key convenience and the assurance of a fully modernised feature-rich home for the aspirational. Three bedrooms (all with water views), two bathrooms (master ensuite), For more info on this property click here

TAHUNANUI BEACH-ROCK-ISLAND-THE CUT-BOULDER

Purchasers who are actively viewing Nelson’s top residential real estate must view this property with me today.

P.O.A.

This is a brilliantly crafted home possessing a unique ridge-line position offering almost 360 degree views with vistas including Mount Arthur and its surrounding mountain ranges as well as a seascape of Tasman Bay reaching across to Nelson city, The Glen and D’Urville Island. Set amongst verdant pastures, it also en-compasses three rental properties plus grazing income from the 14 ha (33.6 acres). The outlook is one of the most spectacular in the Tasman Bay region, and is enhanced by the charming outdoor living areas, heated in-ground pool, and spacious pool house. The near new home has the classic design of an English country lodge on the exterior giving forth an aged feel of another era with modern contemporary interior that also highlights some traditional pieces. Central heating, log burner and double glazing ensures this is a perfect home for all seasons, and the internal double garage is enhanced by additional garaging external to the house. The land lends itself to a variety of agricultural, lifestyle or horticultural activities, and there is a water right that will benefit any such use of this rolling, arable land. For more information click here

THE ULTIMATE COUNTRY ESTATE - 310 Pomona Rd. Mapua Deadline Sale.

Located in one of Nelson’s most prestigious areas, this quiet and secluded, two level four double bedroom home is within walking distance of colleges and preparatory schools and is a short drive from the city. Its elevated northwest facing position, against a backdrop of the tree-studded Grampian hills, ensures the property enjoys all-day sun, shelter and commanding sea and mountain views. The setting is superb.

Set amongst 997 square metres of lush, low maintenance gardens and generous outdoor entertaining areas, the solidly constructed 260 square metre home was built in the 1980s. It combines cream roughcast plastered exterior walls with karaka green garage doors and trim and a matching corrugated iron roof. A cedar weatherboard wall, with marine-style railings, extends along the front of the upper level deck. For more information click here

“THE CALL OF THE TUI”. 28 Allan St. Nelson P.B.N.

165 Kanuka Rise is a brilliantly crafted home possessing a unique ridge-line position offering almost 360 degree views with vistas including Mount Arthur and its surrounding mountain ranges as well as a seascape of Tasman Bay reaching across to Nelson city, The Glen and D’Urville Island. Set amongst verdant pastures, it also encompasses three rental properties plus grazing income from the 14 ha (33.6 acres). The outlook is one of the most spectacular in the Tasman Bay region, and is enhanced by the charming outdoor living ar-eas, heated in-ground pool, and spacious pool house. The near new home has the classic design of an Eng-lish country lodge on the exterior giving forth an aged feel of another era with modern contemporary interior that also highlights some traditional pieces. Central heating, log burner and double glazing ensures this is a perfect home for all seasons, and the internal double garage is enhanced by additional garaging external to the house. The land lends itself to a variety of agricultural, lifestyle or horticultural activities, and there is a water right that will benefit any such use of this rolling, arable land. For more information click here:

PRIVATE, PEACEFUL & ECO-EFFICIENT - Wakapuaka P.B.N.

From the moment you enter this 336m² beautiful home the ‘build quality’ is obvious. This substantial four bedroom with two ensuites and a bathroom home features high quality fittings throughout. The main living spaces all provide views over the city to the Haven one way and Mount Arthur in the other direction.

The open plan kitchen/dining area is well designed with large work spaces and solid timber cabinetry. The 1400m² section faces north to maximise the view and the sun and it is well planted in low maintenance shrubs that blend in easily with the adjoining reserve. This home is an impressive architectural masterpiece, magnificent in every way. For more information click here:

GORGEOUS WITH FOREVER-VIEWS - 94 Panorama Drive P.B.N.

Set well back from the road, in a quiet secluded setting, this charming single level, three double bedroom home enjoys glorious garden and mountain views. Surrounded by 9,153m² of park-like lawns, studded with magnificent trees and lush gardens, the property is a short drive from Richmond. here are a number of award winning vineyards nearby and the area is noted for its excellent schools. Built in the 1980’s, the home combines Hardiplank exterior walls, aluminium joinery and a newly painted corrugated iron roof. The interior is newly painted throughout. Sliding doors in the open-plan family room and dining area and a door in the kitchen access a spacious, newly oiled timber deck and outdoor dining area, or a large pergola-framed courtyard and BBQ area. The property features a number of outbuildings including a double garage, with an attached office, a covered woodshed, two further sheds and a holding pen, suitable for horses or a pony. For more information click here:

FLAT PRIVATE & CLOSE TO RICHMOND - 540 Main Rd. OFFERS OVER $579,000

Cameron Bagrie ANZ Chief Economist.

excerpt from Bayleys Homefront Magazine

June 2011

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No News Is Good News

T his year’s Budget came and went with little fanfare for the property market – perhaps a case of no news is good news. In the last month we have seen a rebound in building approvals and a small lift in property sales.

Mortgage approvals are currently tracking above levels seen in 2010. The record underlying deficit in the economy for 2010/2011 outlined in this year’s Budget came as no surprise. The tight budget will take some pressure off the Reserve Bank of New Zealand in terms of how high the Official Cash Rate would otherwise need to go. The 2.2 percent rebound in building consents in March was to be expected. Of late this has been helped by the upward trajectory in the housing market, and this is helping to underpin the demand for residential construction.

Nationwide, house sales rose a seasonally adjusted 0.3 percent, which followed a 4.5 percent rise in March. Property sales have continued to lift from their late 2010 trough, but they remain around one third below historical averages. There have been signs of recovery in the Canterbury property market, with April sales volumes managing a hefty 54 percent seasonally adjusted increase compared with March, but were 16.3 per cent lower than levels seen 12 months earlier.

House sales outside of the Canterbury region have showed mixed results. In seasonally adjusted terms, the median number of days for a property to sell decreased ever so slightly from 45 days to 44 days. The number of mortgage approvals – a timely barometer of pipeline activity – shows activity above what was seen in 2010, but still below the number seen in 2008 and 2009.

The Christchurch earthquake has muddied the picture in terms of gauging the impact of migration on the housing market.

However, the latest migration data from Statistics New Zealand suggests that the net migration slowdown following the Christ-church earthquake is not likely to turn into a mass exodus of resi-dents. The smaller net outflow was driven by a five percent season-ally adjusted fall in permanent and long-term departures.

(Thanks Cameron, great to have you on the show…)

Jeremy Matthews Residential Sales Specialist & Auctioneer ph: 03 546 9455 mob: 0274 379 485 email: jeremy.matthews@bayleys.co.nz

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“If I Sell Privately I’ll get More Money for My Property by Keeping the Agents Commission.”

To be fair this is not always a myth because some private vendors do manage to achieve an acceptable real estate sale. But for the vast majority of private vendors ’saving the commission’ is a myth which many learn at their cost. Why? Because in the final analysis it is their purchaser who ends up saving the commission, not the vendor. How? For purchasers ‘Private Sale’ is clear code for “Buyers interested in this property can deduct agency commission off my asking price (for a start) then pitch their opening offer anywhere below that.”

Who has just saved the commission before they even start?

Private purchasers know the distinct advantages of buying privately. They are cash buyers and therefore in a strong negotiating position. They study the recent sales stats around their target property. They are bargain hunters, naturally. They know competition drives prices up and that ‘Private Sale’ properties receive less enquiry and therefore less competition.

Naturally, astute vendors do their homework too. They don’t want to give their property away. They want the same or better money that other properties like theirs are getting. But those other properties have commission built into their recorded sales prices which makes their use as a pricing-guide questionable. Why would a Purchaser pay the same price for a property where commission is included, for a similar property where commission is not included?

Finding, focusing, and managing ALL the potential buyers for a particular property, then negotiating the premium price from them is where an agents added-value is more than demonstrated in dollar terms for his/her vendor client.

In 9 out of 10 cases the real estate professional will put more money into their Vendors bank account at the end of the transaction than the private vendor can achieve on their own even without agents commission. 91% of successful real estate transactions conducted in New Zealand today confirm this fact.

For a premium price from the entire pool of buyers, use a professional.

SOLD!!

P robably the best way to describe a Dutch Auction is first to describe what it isn’t.

A Dutch Auction is not a scenario where a real estate agent plays one buyer off against another (real or

imagined) during negotiations. Such practice is immoral, unethical and illegal.

An authentic Dutch Auction is where the auctioneer starts at a top price and comes down in steady increments until one buyer puts their hand up. In doing so that buyer secures the product. Should two or more hands go up in the same instant the auctioneer then reverses the process by increasing the bids until the last remain-ing buyer secures the product.

Why the term ‘Dutch Auction’? Because that is how batches of flowers and other perishable goods are sold daily in the markets of Amsterdam. The obvious speed and blunt honesty of the process has seen it employed in similar markets around the world. Its advantage is that it assumes all wholesale buyers present will already know the viable market value of the product and the only area to be decided is the small ‘grey-area’ around the actual sale price at that hour….which may change with the arrival of the next truck, boat or barge.

Auctioning more valuable items like fine art, exclusive jewelry, antiques, collectibles, big-ticket one-offs and real estate requires a more considered and long term process. The market value of these items is not already known and can only be revealed when competing purchasers have run to their respective limits in a public auction arena. The last bidder either secures the item or at least has won the courtesy right of first refusal post-auction.

The often heard statement from skeptical real estate purchasers saying “I’m not interested in getting into a Dutch Auction” is a misnomer. What they really mean is “I’m not interested in being played-off against the other” and they are right. Only in a public auction are bids in the public domain. (and therefore more powerful). With every other method of sale, prices and conditions are strictly confidential.

Jeremy Matthews Residential Sales Specialist & Auctioneer ph: 03 546 9455 mob: 0274 379 485 email: jeremy.matthews@bayleys.co.nz

94a Panorama Dr. Sold above $135,000

25 Somerset Tce. Sold above $540,000

41 Mount Heslington. Sold above $865,000

118 Princes Dr. Sold above $605,000

277 Rutherford St. Sold above $380,000

88 Valley Rd. Sold above $385,000

19 Sunview Hghts. Sold above $1,350,000

Every one of the above Vendors employed Bayley’s uniquely successful marketing programme and negotiating acumen to sell their properties for the best possible price. For results like theirs call Jeremy Matthews today.