December 2012 White Paper by Brian White, Chairman, Ray White Group.
As far as the real estate market is concerned, Spring finally arrived in November!
Would its delayed arrival still have happened without an interest rate cut? Who knows. But it did happen. And wasn’t it welcomed. Activity levels immediately improved. Open for inspection attendees jumped. Mind you, it wasn’t all plain sailing.
Anecdotal stories of young people putting off purchasing homes through “the crisis in Europe” surprised the writer with their frequency. It’s hard to remember a time when Europe would so dominate the behavioural patterns of Australians. Such is the remarkable uniqueness of our times.
But the key driver in the interest rate cut was not the actual amount itself. The signal that was sent from the Australian Reserve Bank to “forget about future interest rate increases for the foreseeable future. If any more re-setting of official interest rates is to occur, it will be on the down side.”
It is a powerful message that surges through a community. On the one hand, negativity, on the other hand, renewed confidence all meeting the thousands and thousands of transaction processes.Some vendors satisfied. Other vendors sadly disappointed.
Thus our total of $2.4 billion for November gave pleasure. It is the best result since March this year. Actually, also slightly ahead of November 2010. Proof that the market is far more robust than some expected. (Our New Zealand numbers were again ahead of the same time last year – a traditional bell weather test for us.)
Everyone says that we have so much data that permits everyone to become an “expert”. Yet, the fact, in our opinion, that 50% of all vendors that accept an offer have already rejected a higher bid, defines the confusion better than any words can paint.
The debate about whether or not to auction continues to be “evergreen”. We believe the same percentage of properties is still being auctioned. In cases where it is possible to create competitive bidding for a property, there is nothing that gives more confidence and strength to a buyer’s attitude than the realisation there is another purchaser in the market who wants that very same property.
Buyers seem to trust the actions of their peers far more than any data printouts or “expert” comments.
Of particular interest, was the news late in the month, that the Christchurch property market is now operating at the same levels of turnover that it experienced prior to their devastating earthquakes earlier this year.
Sure, there’s been some re-positioning of desired residential areas within the Christchurchmetropolis, but it shows the definite commitment of the citizens of that city to back its future and its revitalisation. It seems only a few months ago when pundits were describing Christchurch as “a city that will need to be abandoned”. How dangerous are predictions!
The company’s Loan Market results were at a new record, reflecting the powerful role that a dedicated mortgage professional brings to the purchasing / selling process.
