Property Investment
3 min read
Author: Ed McKnight
Our Resident Economist, with a GradDipEcon and over five years at Opes Partners, is a trusted contributor to NZ Property Investor, Informed Investor, Stuff, Business Desk, and OneRoof.
Reviewed by: Laine Moger
Journalist and Property Educator, holds a Bachelor of Communication (Honours) from Massey University.
It’s hard to figure out what to offer on a house. In July 2023 only 45% of properties for sale were listed with a price.
Most agents don’t put a price on the properties they sell. They’re put up for auction, tender, deadline sale or price by negotiation.
A few months ago I was looking at 12 Maple Place, Rangiora in Canterbury.
It was listed online without a price. So how do you figure out what to offer?
I can look at online estimates like on OneRoof and Homes.co.nz.
But these aren’t always accurate. And real estate agents can sometimes manipulate them.
So here are the steps you can take to figure out what a property is worth.
First search for the property. Go to the OneRoof homepage. Type in the address and find the Property Estimate.
One you’re on the property page scroll down to the map.
You’ll see properties that are currently for sale. We don’t want those.
You want to know what people are willing to pay for properties in the area. That will give you an idea about what the property you want to buy will sell for.
Unselect ‘For sale’, and tick the ‘Recently sold’ tickbox.
Now you can hover over the red dots and see what similar properties have sold for.
For example, one property two streets over sold for $810,000.
Next compare these recently sold properties with the one you want to buy.
What happens if a recently sold property is nicer than the one you’re looking at? Then the one you want will probably sell for less money.
If the property you want to buy is nicer, then it will probably sell for more money.
In this case the property I wanted (Maple Place) isn’t as nice as the one that recently sold (Beech Drive).
The one I want has an extra bedroom but it has less land. And looking at the photos, the one that recently sold is newer and nicer.
So I don’t think the person selling Maple Place will get the $810,000 the other property got. So I would offer less money.
It can sometimes be hard to get all the information from one site. OneRoof doesn’t always list the number of bedrooms and bathrooms for recently sold properties.
So I also check Homes.co.nz and realestate.co.nz to double check.
You can’t just look at one property. I recommend getting the numbers for at least another 7.
Create a spreadsheet. Put the nicer recently sold properties above yours. Put the ones that aren’t as nice below.
Here’s what I got for Maple Place –
Properties that are slightly worse than the one I want sold for $730,000 – $742,500.
So the property I want to buy will probably sell for more than this.
Properties that were nicer than the one I want sold for $780,000 – $820,000.
So I should offer less than this.
An offer between $745,000 – $775,000 is probably fair.
Most agents pay thousands of dollars to get this information. But you can get it for free on OneRoof.
The best part is you can use this information to negotiate.
If an agent tried to get me to offer 780,000 for Maple Place, I could say “56 Acacia Ave (around the corner) sold for $780,000.
“And that property has a larger floor plan and bigger section. It’s also nicer. Your seller isn’t going to get that much.”
So running the numbers properly can give you confidence when deciding what to offer.
I ran these numbers a few months ago. The property on Maple Place ended up selling for $750,000. Within the range we expected.
This process works and takes about 30 minutes. Give it a go the next time you’re looking for a new home or investment.
Our Resident Economist, with a GradDipEcon and over five years at Opes Partners, is a trusted contributor to NZ Property Investor, Informed Investor, Stuff, Business Desk, and OneRoof.
Ed, our Resident Economist, is equipped with a GradDipEcon, a GradCertStratMgmt, BMus, and over five years of experience as Opes Partners' economist. His expertise in economics has led him to contribute articles to reputable publications like NZ Property Investor, Informed Investor, OneRoof, Stuff, and Business Desk. You might have also seen him share his insights on television programs such as The Project and Breakfast.
