The cost of moving house under scrutiny

Press, 8 March 1989, Page 57

The cost of moving house under scrutiny

Foremost in the minds of prospective house buyers arriving in a new town or city or preparing to shift to another suburb within their existing city is the question. How much will our new property cost? Obviously in that form the question is unanswerable. It depends on whether the purchasers are proposing to trade up or down or are simply seeking a comparable property to the one that they are leaving. Then there is the influence of land values. A property-seeker may soon find a home of similar design, layout and age constructed in the same materials of their existing home — indeed it may well be off the very same plan. But other economic factors will prevail, not the least being the local price of land. Values in some suburbs in the main cities are likely to .be much higher than those in smaller centres, presenting new arrivals with a financial hurdle. On the other hand, even in the larger cities there are suburbs where property values may well equate with values from the newcomers’ home towns, and for those migrating from cities to smaller cities and country areas or moving from one town to another the opposite is likely to result, with values being attractively low. In any event, it is a matter of having to accept what one finds. Obviously, property-seekers who consult real estate agents will get the information that they require. Agents and their salespeople possess local knowledge backed up by their own data extracted from sales. In most cases they will also be participating in the Real Estate Institute’s nation-wide statistical scheme which now, being more than a year in effect, is proving a real boon for marketing for all concerned. It is now possible for a person in, say, Hamilton, who is proposing to sell up and shift to, say, Timaru to either work through a

local agent or to contact an agent in Timaru and request information on residential property values. The more specific the home-seeker is the more precisely tailored will be the information. The R.E.I.N.Z. has divided New Zealand into 14 real estate districts and the incoming sales data from agents throughout the country each month is processed to give both national and district results. For some time the institute has been distributing a monthly summary to the media for publication showing average house sale prices, and now has added a median price to more accurately reflect monthly sales results and establish trends. The median is based on the mid-price range in data to avoid a result unduly influenced by unusually high or low price sales. Obviously, this information used by newspapers and broadcast media, planners and the like provides only an indication as

averages are averages, medians are medians. The precise data to pitch against comparable properties is not published but is in the hands of participating agents (those who are involved in residential sales). Going back to that example given above of a person who is leaving Hamilton for Timaru, the real estate agent in Timaru can use the sales data from statistics to add to a portfolio of available properties for the prospective purchaser to view. Such information, including illustrations, may even be sent to the prospective purchaser if the agent is satisfied that the inquirer is a definite prospect. Of course, newspaper real estate advertising columns, the specialist property media and agents’ own publications will give a lot of information, but the statistical data provides a great deal more — if individual agents are prepared to release it, and they will if the inquiry fits into their marketing strategy.

The statistical data sent back to agents gives full information on residential sales which become unconditional during the previous month. The data is broken down to individual sales and provides the name of suburb, street number, street name, listing price, selling price, listing date, selling date, number of bedrooms, type of property (e.g. home, apartment, or home with income), whether it’s a new or existing dwelling, on freehold or leasehold land, size of land, the Government Valuation and date of valuation. From that data a real estate agent can identify all sales made in streets in the area of his/her operation and extract information to get an up-to-date analysis of local sales. For example, a study of the differences between listing price and selling price will accurately indicate current market valuation and how that compares with the current Government Valuation, and the difference between listing date and selling date will reliably indicate the current time houses are taking to sell in the area over all, or in smaller localities and even in a particular street if sales are sufficient in that state to indicate a trend.

The data greatly assists with valuation work, allowing agents and salespeople to cross-check their appraisals. Armed with such information, an agent can provide comparative values based on recent sales of, say, a 110 sq m brick and tile, four-bedroom 10-year-old house on a flat section with a basement double garage, in any street in his locality or, if he chooses, in any locality in the city or entire district — e.g. all of the Canterbury/Westland district. Note: The costly statistical data provides participating agents with an exclusive marketing tool for agency business. They are therefore likely to decline to provide information from that source to satisfy casual inquiries.