KEY POINTS:
Murray Cleland, President of the Real Estate Institute of New Zealand.
Q. Most properties in Auckland, especially at the higher end of the market, seem to be sold by the open homes and auction system, because, I suspect, it benefits agents since they spend the minimum amount of time at open homes and it's hassle-free when dealing with potential buyers. The vendor is also expected to pay advertising costs. How then can the agents justify astronomical commissions?
Alex K (by email)
A. Open homes are a marketing method which allows a number of potential buyers to view a property at a given time. Not all homes are sold by auction and it is just one method of marketing a property regardless of its value. In any property transaction considerable negotiation takes place. Marketing a property is done in consultation with a vendor, who may choose to pay for advertising to gain greater exposure for the property.
Q. I'm on an average wage. I can't afford to buy a house or to rent an average one. Others seem excited about house prices being so high - as if it's a miracle. To me, housing is a right not a business. Property development seems to be the new phrase for greed. Who should be doing something about this?
Bruce, by email
A. The housing market is very strong which will continue as long as demand outstrips supply. Latest REINZ statistics show the number of residential property sales for March were the second highest recorded by the institute. The situation is fuelled by investors buying and selling as well as home buyers, albeit at higher prices. Increasing the supply of property, through the Government working with local authorities to make more land available, may be one solution.
Q. Do you think realtors should be touting for trade by sending letters to householders asking if they want to sell their houses or putting flyers in letter boxes? Up until 15 or so years ago they were agents, called upon for assistance in finding or selling a property. This present aggressive policy has, in my view, been the reason for the escalation in house prices.
John Poole, by email
A. Rising house prices are market driven. Direct marketing is a proven general sales strategy. The institute's position is that members should avoid distributing mail not addressed personally to those mail boxes which clearly indicate it is not welcome.
Q. What is the maximum commission a real estate agent should be asking for on a house sale? How much can a seller bargain an agent down?
M Macpherson, Auckland
A. As with any contract, all terms are negotiable between the parties.
Q. People have been predicting a crash in the property market for the past 10 years. Why do you think it hasn't happened yet?
Carol Jones, Tauranga
A. Rising property prices are a reflection of the housing market, which is very strong. REINZ statistics released for last month show national median house prices have risen by approximately $100,000 in the past three years since March 2004. The median price increased 2.5 per cent alone over the month between February and March this year.
* Next week: Heather Henare, Chief Executive of Women's Refuge. Send your questions
