A background of more than 30 years in news media until 15 years ago gives me some insight into how news stories are developed. I’ve thought recently how relevant this is now as so much of public sentiment is shaped by the news stories covering our population’s relative obsession with property.  And sentiment, especially confidence or lack of it, very much helps to shape real estate markets.

After a wave of reports since late 2015 till late last year on the extraordinary increases in residential property prices, the overwhelming message in recent months has been about the cooling of the market. There are some basic facts behind these reports – among them rising mortgage rates, tightening of bank lending, sales numbers falling, listing numbers increasing and buyer interest waning. In summary, the market has changed from favouring vendors to one where buyers, once they have lending approval, have more control. The balance has shifted, as it has in the past every four to seven years or so in New Zealand since the early 1970s.  The effects of this are seen at the real estate coal face. There are now fewer unconditional offers, more offers subject to property sale and generally more time and caution shown by buyers. None of this is a bad thing. In fact, it is a much more sensible approach to what is usually one of the largest financial transactions many of us undertake.

News relies on reporting change, and often the more dramatic the change or event, the more newsworthy it is deemed. It is not uncommon for reporters to emphasise change to create a more dramatic effect, a more newsworthy story which is reflected in our emotions. Anyone reading about the property market in New Zealand recently will conclude that it is all doom and gloom from here. But though the gloss is undeniably fading from aspects of real estate, there are some important points we need to remember:

• In Dunedin, the median residential sale price is still in the mid-$600,000s, above the $620,000 of 12 months ago, and more than $200,000 above the $427,000 of July 2019.
• Listing numbers are increasing but are still relatively low at around 600. This compares with a decade or so ago when listing numbers even in winter were closer to 1000.
• Property as a long-term investment still has merit. Anyone who bought even a few years ago will concur. This has even more relevance as we learn recently that New Zealand is now experiencing record inflation.

My constant message to buyers and sellers is that property is a good long-term investment. Yes, the timing of a sale determines how much profit a seller will make, just as a well-timed purchase can mean the difference between a bargain or not. So often, we have seen those who buy, even in uncertain markets, reap the benefits of their decisiveness years later. Getting on the property ladder is still a wise move for those who can save the deposit. And for property owners, if your circumstances mean you are considering selling, today’s market is still a good one, certainly not as bad as reports suggest.