It's 2024 and we are all back at the office. Yes early but that's who gets the worm...and so plenty of time to look over the last 300 apartment sales for any missed value movement.

Nothing so far but I did notice something concerning.

Numerous occasions of the same or similar apartments selling for quite different prices.

Yip lots of the same apartments and some in the very same building selling for up to $100,000 less than others.

Once or twice this does happen due to the apartment's condition or owner's circumstance forcing a quick sale... but more than this tells me there is confusion in the market.

Why is this happening? 

In a time of quick value change apartment complexes don't all suddenly change in value...it takes time due to three main reasons. 

1) Sales don't happen every month. 

Apartment buildings don't have sales happening all the time. Most complexes have periods of no sales for months at a time.

This creates a disjoint with the market as many agents only look at sales in the building they are selling in.

2) Sales stats are old news...always.

When you see a sale result it's already old news. The statistic could be up to a month after the contract was drawn up and the price agreed upon, mostly due to apartment sales having longer conditional periods than houses.

Then there is the marketing campaign. Most don't realise the actual sale was created from the marketing period weeks or even months before the sale. 

A sale stat of two months ago is more likely to be telling of a market of 3 to 4 months prior and when there is market movement that can be like night and day. 

3) One must go LIVE!

This is something never taught or done by valuers because it relies on facts but facts that are debatable. 

When one looks at prices achieved, one must also look at what the demand indicators were at the time and then compare those same indicators to how they are behaving in today's market

• Sales inquiry numbers.
• Days on market averages 
• Multi-offer and registered bidder numbers
• Buyer sentiment

These must all be looked at and if any up or down change, the value assumption needs to be adjusted. These indicators are what change value and so are very important.

The good news is this confusion has confirmed what we were all hoping...

That we are experiencing a quick recovery of values that were lost due to COVID. 

Yes, I was very confident but one can never be sure and it's great when the market confirms it for you.

So how does one determine the right value?

There is a bit more to it, but in a nutshell, you don't rely on the sales of any one building. 

There are over 20,000 apartments in the CBD, 30,000 if you include the fringes, 60,000 over the whole of Auckland, and a total of over 900 complexes. 

For all apartments, there are multiple other complexes of similar apartments to draw value from.

One must identify the complexes that have similar apartments, know the correlation in value they have, and search for all recent sales. If a few of them have moved but sales in the building you are looking at have remained the same you know there is a very good chance there has been an unrealised shift in value.

Once this has been done (and again there is a little more to it), one must then look to the grey of what was happening at the time of the sales stats and today's live data. 

What story is it telling? Is it a positive one? It should be if there has been a shift...but not always as buyer sentiment can play a part that is not easily as measurable.

All the above then needs to match the value you reach.

It's hard to put in writing something you do so often that one then establishes a feel for, but I hope it helps you see a bit of what's involved and if anyone is talking about the value of your apartment and only mentioning sales in your building you know you have a few more questions to ask.