"Fear factor" confounds logic says Harcourts CEO
21 September 2008 - While the first few weeks of September saw an increase in activity in the real estate market it
seems the "fear-factor" returned towards the end of the month, confounding logic in some ways according to Harcourts New
Zealand CEO Bryan Thomson.
Commenting in the latest Harcourts MarketWatch newsletter Mr Thomson says September was much anticipated by all in the
real industry and for the first three weeks of the month results were closely aligned with expectations of a lift in
activity, both in terms of the volume of new listings coming to the market and the number of sales being concluded.
"But then the flare-up in global financial markets appears to have reactivated the 'fear factor' here, with activity
slowing again presumably as people tried to make sense of the situation and how it might affect them," he says.
Mr Thomson says that in lots of ways the current situation confounds good logic, especially when it comes to buyers in
the residential property sector.
"The majority of us purchase a home to provide a secure place to live and enjoy life in. Right now owning a home is
becoming more affordable by the day with interest rates falling, tax cuts starting and house prices easing to more
attractive levels. Given this logic suggests that house buyers in particular should be active," he says.
"Those sellers who are looking to trade up too would be expected to be seize the day in these conditions. Sure they
could receive a little less than they may have expected to get last year but the jump up to their next purchase could be
a lot less than if they'd made the move 12 months or more ago when the market was red hot."
Reporting in Harcourts MarketWatch that according to the group's latest figures new listings remained at a premium in
all markets in September and written sales were down 11% to 35% when compared to September 2007, Mr Thomson said people
should "act now in order to take maximum advantage of the market while many others wait, wonder and worry".
ENDS