A NEAR-doubling of the number of properties sold in Gisborne in July, compared to July 2011, indicates strength in the local market. But the perception of values may not be what they seem, real estate agents say.
A total of 41 homes were sold in Gisborne in July, compared with 23 in the same month the year before — a jump of 80 percent compared to the 19.9 percent increase recorded nationally.
However, Real Estate Institute of New Zealand figures list the median sale price in Gisborne as just $190,000 — a drop of $20,000 on the price in July 2011.
Commentators say the reason for that was the number of sales at the sub-$200,000 end of the market.
Among those were a number of mortgagee sales — one a wharfside apartment that sold for $96,000 which was 75 percent below its $380,000 rateable value (RV).
A retirement unit also represented a low-value sale, an indication of the pressure on that sector of the market due to the desirability of recently-developed retirement villages.
Another property, not a mortgagee sale, went for just $65,000, but Gisborne agent Neil Walker said there was little significance in the Mangapapa bach having sold for nearly 60 percent under RV.
“In that case the buyer will have to remove the bach to get a clean slate to work with, so the section actually had negative value,” he said.
“In any case, RVs are often just irritating, frustrating numbers that give the wrong idea of a property’s worth.
“What people need to realise is that if their properties are not well-maintained and well-presented when they take them to market, that will really impact on what buyers are willing to pay.”
The ANZ Bank’s housing guide says RVs are set by local authorities for the purpose of assessing rates but are not based on detailed reviews of individual properties.
“They don’t include chattels such as carpets or appliances and they may be out of date,” ANZ says.
“Depending on the area and the property, you could sell your house for significantly more or less than the RV.”
Mr Walker said the healthy number of sales recorded in June and July (both 41) indicated that the real estate market was moving back towards “normal” activity.
“Gisborne had an all-time low of fewer than 350 sales in 2011 but this year we are on target to achieve around the 450 we would normally expect,” he said.
Agents were now waiting to see if increased activity would entice owners of high-value homes back into the market, which would have a spin-off effect on recorded sales values, Mr Walker said.
“We will be very interested to see where that median price is going to jump to.”