Glenda Whitehead: Catching a buyer

Opinion

Glenda Whitehead is QV valuations manager at QV Auckland.

It is never easy to describe the housing market in a one-line sound bite. If I had to sum up the "tone" of the market today, it would be that participants are taking a considered approach. They are acting sensibly, pragmatically and typically with a good deal of thought. Most are obtaining professional advice and time is not one of the main driving factors to make a decision.

From my interaction with buyers, there is a desire to purchase but only if the property meets their requirements and they can get finance. However, this can be a frustratingly long process for both purchasers and vendors.

In many cases, sales are taking time to occur, but we have seen no direct correlation between days to sell and price level achieved. You will not necessarily get the best price for your property if it sells in two weeks versus five weeks. What we are seeing is correctly priced property, well-built homes, and those in favourable locations with likable qualities, achieving good prices, at least in Auckland.

To purchase these properties many still need a mortgage. During the boom, buyers often purchased a property at will and banks competed for their business after the purchase. So fronting up at an auction with a pre-approved loan and bidding to your limit was possible.

Today, however, the banks' lending policies are not so liberal. In many cases pre-approval comes with conditions, such as a valuation by an approved Registered Valuer and a builder's report. These do come at a cost, so a buyer needs to be really serious about a property and confident their bid will succeed before proceeding. As such, many buyers are frustrated that so many properties are initially being auctioned. Even if the property meets their needs, and is in their price range, they may not be in a position to bid.

While we hear of successful auctions, we are also hearing of many agents who are using this approach to bring buyers to the table, with the actual deal being done in the weeks following. In a number of cases this is with buyers who are not in a position to bid on auction day.

This all reflects the ever changing landscape of the residential property market. We are now seeing a different approach being taken by buyers; their expectations for quality housing are higher. Included in the mix are the changing requirements of the finance industry. This makes for an interesting market dynamic. We now see people taking their time, as well as seeking professional advice, and the overall sale process slowing slightly.

In today's market, it's important for those selling their property to understand this and that the highest bid may not come quickly or in the form of an unconditional agreement. They need to be realistic about who their buyers might be and under what circumstances they will come to the negotiating table. A little patience will see a deal coming together over time.

We are seeing more people, who are serious about buying or selling, doing their home work before they either consider listing for sale or putting in an offer to purchase a property.

The positive outcome of this is that market participants are well informed and have realistic expectations. Consequently the market functions well.

So from where I am sitting, we have a slower, but healthy market.

* From the New Zealand Herald's quarterly 'Property Report' - a guide to house prices and great places to live.