I’m often asked how the market is doing. Owners are wanting to know what their property would be worth if they sold. And buyers want to know if it’s a good time to buy.   There’s no simple answer to those questions – but here are some thoughts and guidelines that will help you answer for yourself.

Generally, if you are selling and intending to buy in the same market, don’t leave it too long after selling to buy again.  I was reminded of this maxim recently when a buyer came to a property I marketed recently at a very low price indication. He confided that he had sold in Dunedin a few years ago and gone to Australia to live for several years. Now he’s back and, as he said, the market went crazy while he was away and his savings won’t stretch to even the quality of property he sold. He has been forced to start again from near the bottom of the market. That’s an extreme example but we do encounter people who have sold and banked the proceeds, taken their time looking to buy and have ended up the worse for wear financially and become resigned to renting for the rest of their lives. Don’t be that seller.

Is now a good time to buy?  Admittedly, the market is trending down from where it was at the end of 2021. So compared with December 2021, now is a good time to buy. But compared with three or four years ago, the market is much higher. I can relate instances of property that sold even three years ago and re-sold late last year for several hundreds of thousands more – and without significant improvement carried out by the owners. I can also give examples of property that sold in the past 12 months that would struggle now to fetch that sale price for the new owners.  But the real point here is that the market price of a property only matters when it is bought or sold. It is a bit like the sharemarket or your Kiwisaver.  The price of shares or the value of your Kiwisaver is only of real importance if you are about to sell – or buy. If you are investing for the long term – and all property investment should be considered a long-term investment – you are likely to make capital gain. How long is long term? It’s said – with reasonable evidence, that on average the value of residential property doubles around every 10 years. As an aside the average family home changes hands in New Zealand every seven years; every four years for lifestyle property. But don’t be like many buyers we meet who have put off buying for so long that they are now, if not priced out of the market, they are certainly not able to buy the quality of property they could have if they had been more decisive a few years ago.

So back to my question – is now a good time to buy or sell?  A shorter answer is, if your circumstances are right for buying or selling, now is always a good time. Don’t try to guess when the market might hit its low point or high. Few commentators guessed that the market would peak at the end of 2021. Even fewer that it would recover the way it did after the initial Covid lockdown. Some are now predicting the market will bottom out around the middle of next year and rise again. But my advice would be don’t try to make those predictions your guide to buying or selling. The great news for existing property owners is that this market is much more amenable to offering subject to property sale. So if your circumstances are right and you are ready, make that move.