KEY POINTS:
Brian Baker describes his property investment activities as a "hobby". The supply chain manager from Auckland's North Shore has, like thousands of other New Zealanders, taken advantage of the booming property market of recent years by buying and selling homes.
But Baker's latest venture might not, on the
face of it, seem like quite such good business.
He is trying to sell a "classic 1920s three-bedroom bungalow" in Mt Albert, asking for offers over $700,000 - $100,000, he says, below its registered valuation.
And it seems he's not alone.
A Herald On Sunday trawl through Trade Me's property website has uncovered more than 130 properties advertised for sale at prices lower than their registered valuations, some by tens of thousands of dollars.
Real estate industry insiders say it is the clearest indication yet that the once red-hot property market has cooled.
Baker is pragmatic about the asking price of his house. After buying the place earlier this year and doing it up, he was hoping to sell it on smartly, but insists he's not desperate.
"If I was desperate to sell I'd be accepting $600,000 for it."
He said he had been trying to sell the house for about two months and wasn't worried about not making a big profit.
"I haven't done as well as I hoped because of the market," he admitted. "It's taken the gloss off it. It's a very easy strategy when the market is running away. But the market is definitely flat now."
But not everyone is as relaxed as Baker. Some vendors on Trade Me are trumpeting how far beneath valuations they are willing to go. "No presents this Xmas, I'm broke!!!" says one. "Price slash $25k below registered valuation!" advertises another, while another proclaims "I'm in the s*@t!!"
"It's definitely a trend," said property expert Kieran Trass.
"I've been watching it for the last three months. We are in a property slump already. It depends how desperate or keen you are to sell."
Auckland's biggest real estate company Barfoot & Thompson warned vendors this week that properties had to be priced realistically to sell within a "reasonable timeframe".
The company said its stock levels were at a five-year high and buyers had plenty of properties to choose from.
Trass echoed those views. "There's always a point where valuations are optimistic because they [vendors] are looking backwards at a market six months ago which was pretty hot.
"It's a different market now. There is less competition to buy properties and they are taking longer to sell. Very recent valuations will actually be irrelevant. We will see a shift and the market will become more realistic."
Trass said more people could become desperate to sell and start dropping prices below valuations over the next three months. Developers particularly could feel the pinch and he predicted some might resort to tactics used during previous property downturns - such as "chucking a car into the deal".
Deepak Vasa from House Deals, which sells property on Trade Me, confirmed it was becoming more common for vendors, particularly investors, to drop asking prices below valuations.
"They don't mind selling it below valuation to have a quick sale."
One investor, who declined to be named, said there were sometimes other factors prompting vendors to go for quick sales, such as relocation, family bereavement or marital breakdowns.
Another vendor said the market was flooded.
"There are buyers out there, but they are sitting on their hands. They are realising it's a buyers' market. Some people will get quite stressed and get to the point where they are giving houses away."
Brian Baker said he wouldn't be losing any sleep over his "hobby", or the price-tag on his latest investment.
"You hear anecdotally of people making millions on property," he said. "The reality is, there are not many that do. A few make a little bit."
