http://www.voxy.co.nz/business/residential-real-estate-prices-hit-new-highs/5/187432
The Real Estate institute of
New Zealand announced that national sales were down 10% on March last year but
are up 19% on February. Meanwhile, the national median price also reaching a
record high of 440,000 (Hurndel, 2014) . Also there were clear signs
that the national volume of sales was decreasing, with only 2 of 12 regions
that represented only 3.9% of sales showed an increase. Over the Easter and
ANZAC break however, National sales and prices dropped. This is expected due to
many people combining these two breaks and taking 10 days over hence culling
sales (Gibson) . Leading
Auckland real estate Company; Barfoot and Thompson took a 42% dip in April
sales from that of March (April sales were still higher that 2013).
The Reserve bank’s LVR
restrictions are showing a clear relationship to sales dropping with an average
decrease of 13% over the adjusted year.
However on the supply side, listings have increased 13.2% (Gibson) .
These rising prices and
decreasing sales have a negative effect on the macro economy and micro economy.
The rising prices attribute to the increase of inflation and lack of sales will
affect a company negatively and may force them to adjust costs (eg. Barfoot and
Thompson).
With prices rising and sales
dipping, a demand has increased for ‘shoebox’ style apartments. These
apartments allow people (especially 1st time buyers) to get into the
market at prices less than $200000, which is far more affordable than the
national mean (Hill) .
Advice I give to Welly Real
Estate is to invest in the market for smaller apartments, as they are more
appealing (pricewise) to consumers and look to be very popular in the near
future. Also I would look into better advertising as sales in general are
decreasing and this would help increase your company’s sales, as it would give
you a better chance of acquiring the clients over your competition. Lastly I
would look at trying to trim operating costs while sales are low and while you
may be trying to set up in the apartment market.
Works Cited
Gibson, A.
(n.d.). Retrieved from NZ Herald :
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11249728
Hill, M. (n.d.). Retrieved from Stuff.co.nz:
http://www.stuff.co.nz/business/money/9949804/Shoebox-apartments-good-for-Auckland
Hurndel, S. (2014, April). Residential real estate prices
hit new highs. (F. W. Media, Producer) Retrieved from Voxy.co.nz:
http://www.voxy.co.nz/business/residential-real-estate-prices-hit-new-highs/5/187432
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