The Good News Story Property Pessimists Won’t Tell You
Property pessimists are everywhere, trying to throw shade on a booming market because they’re too scared to make a go of it themselves.
A property pessimist can be anyone really… Your husband’s uncle who had a bad run in the GFC, your parents who sold at the wrong time, or even the news and media outlets who are constantly trying to predict downturns.
For some strange reason, bad news sells – especially when it comes to the property market, but I’m here to tell you, don’t always believe what you hear and, be very careful of where your advice is coming from.
An incredible display of this, and a great news story that could have done well with getting some air-time, is how Queenstown made an victorious bounce-back following New Zealand’s COVID-19 lockdown.
CASE STUDY: QUEENSTOWN BOUNCES BACK
Last October I was lucky enough to get some much-needed R&R time in Queenstown. It served as a fantastic break but also a huge eye-opener, and a reminder to do adequate due diligence when it comes to purchasing an investment property.
Now you may not be aware but Queenstown, reliant on its local and international tourism, has been perceived as the market most affected by COVID-19. Because of this, I made a real point of having a look around while I was there. I wanted to see what kind of property was for sale, what was for rent, and how employment was tracking.
I ended up speaking to a lot of people and found the general feedback actually really positive. Most people said things were going well, and that yes, while lockdowns had had a short-term impact on the market, things were well and truly back on track. In fact, one guy said they were up 40 per cent on last year!
Go figure. That didn’t make much sense from what people in other areas of the country may have suspected.
DON’T BELIEVE EVERY YOU READ
So, what did I see? I saw hiring signs in windows. Businesses taking on staff in many of the town’s cafes, bars and restaurants. The place was bustling. I saw lots of sold signs on property and lots of new listings – all in all everything reflected a healthy and relatively strong market. There seemed to be a high level of confidence.
What was more interesting was I also did a bit of a ticky-tour around some of the new subdivisions such as Henley’s Farm and a few other places that we’ve been involved with and WOW. The amount of new building that’s going on was staggering – it was busy! There was no downing of tools. The place was just crawling with workmen and construction. There was mega activity right across town.
And that in itself marks a good point – why do developers pick sites? Not just because they found a cheap piece of land. They pick sites because of the infrastructure that supports it. So, there’s a clue as well.
This status was very positive when you take into account that Queenstown had international visitors up and leave due to COVID-19 and domestic travel halt at the height of New Zealand’s lockdown. It’s no wonder property prices dropped, and rents fell for a while there albeit by a fraction – however with so many job vacancies and most people back to business, my time in Queenstown could very much be summed up as a good news story.
And when I say good news story, I do mean relative to the dramas that we’ve had.
PROPERTY INVESTOR PRO TIP
So, what can this case study teach us?
As property investors we need to tune out the property pessimists (aka the well-meaning family and friends who don’t have a proven track record in successful real estate investing), and instead, we need to do our due diligence.
This means talking to property experts who have their fingers on the pulse and know exactly what’s going on in the particular market that you’re looking to buy in.
Talk to the people on the ground and in the locations that you’re looking at to understand what’s really going on.
Don’t just rely on the headlines of the day because if the media hype were true about Queenstown last October, I’d have seen a disaster town with no one employed, property prices decimated and rents at an all-time low. That was hardly the case at all.
KNOWLEDGE = OPPORTUNITY
Opportunity very much lies in the knowledge that we equip ourselves with. So, if you’re looking to learn more about the New Zealand property market and how you can use it as a vehicle to generate long-term wealth, join us for a free property investing seminar.
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Sue Irons
CEO – Positive Real Estate NZ