Sunday, April 27, 2008

Dreams are dashed on the rocks of reality

Many real estate agents are turning away potential customers because they are demanding too much for their properties, says Realestate.co.nz chief executive Alistair Helm.

"Agents are actually telling vendors they don't want to list their properties any more. Effectively, they are firing their vendors and saying, 'I don't want to deal with you any more because your expectations are unrealistic'," Mr Helm said today.

The underlying problem is that, although the number of properties being listed for sale has remained relatively constant, the number being sold has fallen dramatically.

Last month, real estate company Harcourts added 3013 exclusive listings to its books - a total that was slightly up on the 2857 properties it listed in March last year. But it sold only 1865 properties last month, compared with 2754 in March last year. In percentage terms, the decline was 32 percent.

In March last year, Harcourts had a total of 10,661 properties listed for sale, compared with 13,823 in March this year. That means that, a year ago, the company made one sale for every 3.9 properties it had on its books, compared with one sale for every 7.4 listings 12 months later.

The result is a market in which many vendors will have to lower their prices - or see their properties go unsold. Just how low prices will go is still anyone's guess.

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