Steve Koerber's Old Blog

Remuera's house sold name since 1998 – 021864166

Peter Thompson versus Keiran Trass

Posted by Steve Koerber on June 5, 2008

Tonight on TVNZ’s Close Up Peter Thompson and Keiran Trass spoke about the state of the real estate market.  Peter Thompson defended statistics that show Auckland home sales have slowed considerably, but prices have remained relatively stable.  He explained that many people who cannot sell are simply pulling their homes off the market. 

Over the years I have observed that real estate markets fall much slower than they rise.  And it happens exactly as Peter Thompson explained, because many people don’t sell!  This is one fact that Keiran Trass is over-looking.  In effect, he is wishing the market down.  He seems frustrated that actual sale price statistics don’t reflect actual volume falls. 

Downward price movement will probably come soon, but by the time the doomsayers are saying “I told you so”, sales volumes might be increasing and slowing or reversing the decline. 

I believe the only way we will see 13% price declines (as predicted by the Reserve Bank property experts?) is if sales volumes continue at levels 50% below 2007.  With houses becoming more and more affordable, I can’t see sales volumes staying low.

To balance my comments, my last three sales (this week) have achieved prices well below what they would have been in 2007.  The sellers were realistic because they understood the concept of buying and selling on the same market.  

I feel that investors will be out in force very soon.  When that happens, 13% might seem an impossible dream for Mr Trass.

And another thing, this week Barfoot & Thompson sold a new home in Mt Eden (non GZ) for $1.6million.  There were 16 registered bidders in the auction room!

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