In the property game, sometimes it’s hard to see value until five or ten years down the track. Most of us have had the experience of feeling as though we’re potentially paying too much for our houses, only to feel sheepish years later admitting to how much of a steal they were. However, the longer we spend buying and selling (or working) in the property market, the more we start to see the bigger picture.

The bigger picture isn’t always easy to keep in mind. It takes a bit of bravery to buy when the media is full of doom and gloom stories, or to buy in a region or purchase a type of property that hasn’t been popular in recent times. You need to have enough perspective to think about a single house in terms of much larger trends: supply and demand; employment; immigration; and value.

Value is one of the more difficult aspects to get your head around. It usually involves weighing up a whole pile of variables – price, location, target market, maintenance, style of property. Right now, for example, I can see value in the apartment market because of the intersection of construction costs, flat prices and rising rents. Why do I believe that there are brilliant buys to be had right now?

• New, completed apartments are selling for less than they were in early 2017; developers are forced to meet the market, no matter what they were hoping to sell for. Flat prices for new apartments also depresses the prices of existing apartments and off-the-plan apartments. All this in spite of incredible rises in construction costs.

‘It takes a bit of bravery to buy when the media is full of doom and gloom stories, or to buy in a region or purchase a type of property that hasn’t been popular in recent times’

• There is still a serious shortage of property. You’re probably bored with hearing about this, but the shortage isn’t only not going away, it’s actively getting worse. The most recent MBIE figures show a 71,000 shortfall nationwide. In Auckland the shortage is 44,738 and in Wellington it’s 9,312.
• Rents are rising, improving the yields on apartments and making them almost the only off-the-shelf positive or neutral cashflow property type in Auckland.
• New investors are nervous and lenders are cautious. There are far fewer competitors in the market this year than there were back in 2016, for instance. That puts the remaining buyers in a strong position to negotiate.
• Ring-fencing may be on its way in. If that happens, negative cashflow property investing is going to be far less popular. The value of positive cashflow property will increase (driving down yields, ironically) and that means apartments will be more attractive.
• Prices are predictable, so you can get a preapproval which actually works in the market, you can put in conditional offers and you can expect to have a reasonable amount of time to do your due diligence. This puts less stress on you and makes it easier to buy.
• In summary, you’re buying a product of which there is a shortage, at a time when the market is flat and buyers are scarce, while the revenue is going up. I know right now you’re probably feeling as though you want to batten down the hatches and wait for an upturn in the market. Instead, have the courage of your convictions and maintain a long-term perspective – because I believe the buys you make in 2018 will look like bargains in five or 10 years.

Aaron Tunstall is the general manager of award-winning Impression Real Estate, which specialises in property management and sales and manages over 1,750 Auckland apartments.