The Unconditional Blog

The impartial voice of the industry


Are we seeing some signs of improvement in the property market?

Posted on: December 3rd, 2010 | Filed in Buying / Selling a home, Featured, Media commmentary, Website searching

iStock crystal ballRunning the website of gives us some valuable insight into the property market – providing us with some hard facts, some interesting statistics and some anecdotal feedback from within the industry.

One thing I am keen not to develop is a reputation as a forecaster of the property market. Firstly; one thing about forecasting is that it is likely that you will be wrong more times than you are right. People then tend to remember the time you got it wrong far more than the time you got it right – I did once make this somewhat optimistic call back in 2008 “NZ property market may well see a brighter outlook sooner” – at least I used the word “may”!

Even economists are skeptical about forecasting the property market, and they make a living from forecasting!

However I am conscious that there has been a series of recent articles that show some general improvement in sentiment. The level of mortgage approvals brought some brighter comments from as did some greater competition among the banks with competitive activity around 2 year fixed rates. In addition First National Real Estate were quick to pinpoint some upturn as did Harcourts recently. Barfoot & Thompson have also just released their sales details for the Auckland market showing a considerable pick up from October.

The data I tend keep a close watch on, are unique stats from the web – a rich vein of real time information tracking real people looking at property. The two metrics which for me reflect the level of activity are (i) number of visitors online viewing real estate and (ii) the level of email enquiry to agents, the latter being closer to a lead indicator of future activity.

Usage levels on real estate websites

The chart below tracks the indexed web traffic to a basket of real estate websites monitored by Nielsen. The data is domestic traffic only and covers all of the top 10 real estate sites online. The blue line shows the performance of 2010 measured on a 4 week moving average, with the prior years of 2008 in black and 2009 in red.


The use of an index in the chart, rather than actual traffic, effectively removes the factor of the ever growing usage of the web – more people using the web, more of the time.

The conclusion I draw from this chart is that, as we have been aware, the past 12 months has been subdued. In many ways, very much like the depressed market of 2008 at the time of the Global Financial Crisis. By contrast the activity in the market during 2009 is very evident from the chart, showing heightened activity as buyer initially pounced on distress sales as prices fell, and then with limited stock, we saw some scarcity demand factors. This heightened activity did begin to seriously tail off towards the end of the year.

What we are seeing now though, is some relative sustained activity in searches during November, whereas this time last year the activity was really tailing off. The next few weeks through Christmas will naturally see a slowing down of viewing, but come that first and second week of January the level of activity online skyrockets!

Serious enquiry to agents

On a daily basis we are sending hundreds of emails to agents from interested prospective purchasers of property – these are warm leads and the tracking of this activity provides an insight into the market. As with the stats on website visitors, this chart below which shows weekly email activity is indexed to provide a more accurate view year-on-year as traffic and usage of the site keeps growing.

The blue line for 2010 clearly reflects the extent of the lackluster property market this year, with much lower levels of email enquiries. Whilst showing a tailing off in the past few weeks (which is only to be expected from a seasonal perspective), the tracking of 2010 does show a certain degree of relative strength, especially through that key period of late October through to mid November. The traditional lead time from email enquiry to property transaction would based on these strong periods, give sufficient time to complete transactions pre-Christmas. This might bode well for the sale figures forĀ  November and December, this then ties back into the recent rise in mortgage approvals.

Classically we will have to wait to see if what we are seeing is a true trend or just a short term blip. What is certain is that we are seeing some key indicators begin to point to a brighter outlook. I am certainly not going to call it a resurgent market quite yet!

Article Discussion

  1. Great points Alistair. I’m sensing a good mood with plenty of transactions and decisions being made to purchase. The market’s always great at the right price :)

  2. Mark says:

    “What we are seeing now though, is some relative sustained activity in searches during November, whereas this time last year the activity was really tailing off.”

    Really? I interpret the graph as indicating that 2010 is tracking similarly to 2009 and 2008, though markedly lower than 2009 and marginally lower than 2008. 2008 had a dip in July/Aug whereas this year went to the current level at that time. There is no indication of sustained activity relative to other years based on that graph.

    Similarly, the second graph does not seem to be evidence for “the tracking of 2010 does show a certain degree of relative strength”. Relative to what? The volume is markely lower than the previous two years. The ‘curve’ looks better compared to 2009, but is much worse than 2008.

  3. Alistair Helm says:


    I appreciate the challenge to the interpretation of the charts. I believe there is some degree of improvement, it is relative and has yet to be defined as sustained.

    I guess my objective with this blog is to collate some recent media articles and data with some new data, provide a personal perspective or interpretation – subjective I concede and then engage with respondents to draw out some views. I see in the two comments so far differing views.


  4. In Pt Chevalier, Westmere, Grey Lynn, Waterview and Sandringham we have been very busy with most homes selling within the first 10 days on the market. Many homes obtained multiple offers and several street records have been broken.

    We could sell plenty more homes before Christmas but there don’t seem to be many people either wanting or needing to sell particularly in the $500,000 to $900,000 range.

    November was our best month in 2010 and October wasn’t far behind it so we are certainly seeing an improvement and expect if interest rates stay low then buyers will remain very active throughout the remainder of the summer months.

  5. Mark says:

    Yes, this is a useful blog, and it is good to hear what is happening in the market.

    But I still wonder what it is about those graphs that points to ‘relative strength’ in the market, given that 2010 does not look any stronger than the other two years.

    I.e. do you think that the blue line is going to do something different than the red and black lines?

  6. Alistair Helm says:


    I will confine my interpretation to the second chart as I believe that a true view of the market is likely to come from actual enquiries as opposed to just viewers.

    As I see it the the traditional trend as seen in 2008 and 2009 is for a pick up in enquiries coming into spring – starting in September and running into October, then as the leadtime to close deal pre-Christmas closes so enquiries start to fall away before rebounding in January.

    In 2010 no doubt what we see – a very flat market with no pick up in Spring at all, but then as we approach the end of October we see a pick up – this builds through November and is only now tailing off. Now you could say this is just a delay, that is correct; however considering how flat and lackluster the market has been in 2010 – anything that moves the needle is significant?

    How significant? – we will have to see.

  7. Mark says:

    Thanks for that further interpretation Alistair.

    I guess the big question is whether 2011 is going to track higher, the same, or lower than 2010.

    I also wonder what an ‘upturn’ might mean for sellers and buyers. Sellers will presumably feel more confident that they can sell, and will put homes on the market. But unless the buyers are turning up as quick as the sellers, that will put pressure on inventory levels.

    And it seems that in this economic situation, it is inevitable that there will be less buyers because of financial hardship, changes in the tax system, and skepticism about large capital gains in the next few years.

    This is interesting to me as a first time buyer, but I imagine it is also interesting to an investor who has to sell within the next 5 years…

  8. Mark as a first time buyer the world is your oyster. My parents bought their first home for $10,000 in the early 1960s and have enjoyed roughly a 100 fold increase in value (equity) to $1,000,000. If they tried to time the market back then they might have missed the boat altogther. Don’t miss the boat by trying to time the market. Buy yourself somewhere you can call home and be proud of it.

  9. Alistair Helm says:


    Thanks for your open comments. The property market is fascinating as it is both incredibly logical – very clear buyers and sellers with very detailed transacted product (the house of which nowadays we know an awful lot of data about), yet at the same time it is a very complex and unpredictable market. The motivations for purchase are so varied and at times illogical.

    One truism (and there are many in this market) is that a large percentage of seller are buyer and visa versa. So if you can stimulate the market to facilitate confidence within one group, the flow on effect can awaken a market from what has undoubtedly been a very sleepy period of the past 12 months, and in relative terms 3 years now.

  10. Perhaps a number of other factors will contribute to a potential increase in demand – finance easier to secure, interests rates remaining relatively low, the population continuing to grow while new dwelling consents remain low – i.e a growing under supply.

    What is also interesting is that the median house price is following a historical trend of flattening off rather than sliding backwards.

  11. Alistair Helm says:


    Certainly these factor you quote are pointing in the right direction. However I would make a cautionary comment in regard to median prices flattening.

    The median price is being impacted to a certain extent by the composition of the sales, we are as has been shown in recent Barfoot & Thompson data seeing more activity at the top end of the market. This will have an effect on the median price – pulling it up as the midpoint of all sales skews higher.

    The stratified mean price calculation adopted by the Real Estate Institute in collaboration with the Reserve Bank provided a weighted calculation which ensures such factors are excluded. The current stratified mean sat $356,141 showed a slight fall in October and is still 6.5% below the peak price in Nov 2007.

  12. Alistair,

    Yes – good to see a better measure available. However, it doesn’t really change the long term picture. I’m looking back to 1992, and when we look that far back the pattern is interesting. It reflects the stepped approach that property markets have historically displayed. Longer periods of the market remaining relatively flat, followed by shorter periods of rapid price rises. So during a ‘flat’ period there are small ups and downs – like the down you have pointed out – but over a longer period those smaller fluctuations are effectively smoothed out. Perhaps it;s just me, but looking at the long term historical performance of property eases my concerns about small fluctuations. HIstory tells me that if I am holding my home or investment property for the long term – I ill do well.

  13. Alistair Helm says:


    You clearly have a pragmatic and long term approach to investment with a good appreciation of trends – that is the key as you say to smart long term investment. Those that think there is a quick buck to be made, tend to (more time than not) to find that, that buck has disappeared.

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