I have just spent a week in the US at admittedly a technology conference for real estate, but my overwhelming sense is that we will witness within a year (maybe two at the outside) the transformation of our media consumption

We are at the dawn of the transformation where our simple finger(s) will drive our actions.

It started barely 3 years ago with the launch of the iPhone and as ever the adoption curve has become exponential. The iPhone was followed within a year with a couple of other smart phones all using our simple index finger to drive a complex computing platform in the palm of our hand. That couple of mobile devices (calling them phones is misleading) has grown into a flood as the Google Android platform has provided the open-source option to Apple’s proprietary system.

Adding to the smart phone platform has come the iPad, with a a staggering 3 million iPads sold in the first 100 days – far exceeding the initial sales of iPhones 3 years ago – this for a product costing over US$500 of which the majority of the first quarter of a million buyers had not even seen let alone touched the device before they typed in their online credit card order. A staggering US$1.5 billion in pre-order sales has to be a record for a brand new piece of complex technology.

This pervading wave of new hand-held mobile computing devices radically changes our engagement from the humble keyboard to the screen. For anyone who owns or has used a smart phone or an iPad (of which there are reported to be several thousand in NZ already, yet it is not officially on sale) the user experience is both intuitive and instantly engaging. You are drawn to “click” (touch) and swipe; you pinch to zoom and rotate to change perspective – the keyboard suddenly seems part of the typewriter generation.

The comment was made to great amusement at the conference that the 3 year old son of one of the presenters went up to the TV the other day and tried to swipe the screen to change channel!

Having said that I am still typing this using a traditional keyboard, and that is where the demarcation exists. The touch screen mobile devices are consumption devices, whereas for content creation the traditional PC with a keyboard still retains a functional efficiency. There is a blurring of the edges admittedly when you attach a blue tooth keyboard to an iPad, but that reinforces the point that our adopted manual dexterity for the keyboard is hard to supplant with a touch screen – some how the physical keys depressed to reinforce typing is too ingrained in our psyche, or at least it is for our current generation.

As a point of clarification the expression “media consumption device” does not imply a restriction to just reading magazines, viewing music and movies or playing games – just take a look across the endless aisles of apps for the iPhone or iPad, now totaling close to 200,000 and you can see almost every conceivable concept presenting every conceivable form of data.

So where does all of this take the real estate industry and the property searching process. As I stated in the summary from the Connect conference, “Location is context” and mobile computing devices are location aware devices so this tipping point will be critical for real estate. Being mobile to be able to view property information will benefit both buyers, sellers and agents. The insatiable demands of buyers and sellers to be better informed in the data that lives behind property transactions will be forthcoming at the point of decision making – inside a property, for as much as rich media can provide great insight to a property nobody is going to make that buying decision without doing the walk-through, well almost nobody!

Full Disclosure

I have both an iPhone and iPad – my experience with the iPhone was instantaneous (although I was a late adopter), it is both intuitively simple and yet so staggeringly valuable and versatile. As for the iPad, I have had it for 2 months and I had an initial passion as part of the novelty; this waned slightly, however once I adjusted to its use as a complement to a laptop and the addition of some awesome apps I am now beginning to get hooked – seriously hooked! The recent launch last week in NZ will certainly only enhance the experience as I suspect we will see a flow of excellent local apps onto the “shelves” of the app store.

Property Sales

The number of property sales is a key measure of buyer activity. The Real Estate Institute release this data on a monthly basis from the sales made by all licensed agents in the prior month making this data the most timely and comprehensive. Actual monthly sales data is effected by seasonal factors, for this reason seasonally adjusted data is presented which clearly shows one month to the next if the sales are going up or down.

Commentary:

Sales in June fell by 3.6% from May on a seasonally adjusted basis. A total of 4,575 property sales were recorded by licensed real estate agents in the month of June. Back in June 2009 the total sales was 6,040. In the first 6 months of 2010 a total of 29,844 properties were sold across the country this is down 12.7% as compared to the first half of 2009 when 34,169 properties were sold.

Property Price

The selling price of properties measures that critical balance between what a buyer is prepared to pay and what a seller is prepared to accept. The Real Estate Institute data of prior month sales produces a median price. This raw number is then re-calculated through a model developed in partnership with the Reserve Bank of NZ to create a Stratified Price, which ensures that volume changes in key price segments do not skew the figures.

Commentary:

The stratified price rose slightly in June to $363,925 from $361,600 in June. The June price is up 4.2% as compared to June 2009. As highlighted in the chart above the sale price across the country has remained fairly stable over the past 9 month with some small ups and downs. The current price is still 4.5% below the peak price in the market back in November 2007.

Stock of Property

The number of properties on the month is provided from Realestate.co.nz data and measures the level of seller activity in the market. The data represents the total number of new listings coming onto the market each month and is compiled at the start of each month for the prior month and is published in the NZ Property Report. The measure of properties on the market is represented by the number of weeks of equivalent sales, and judged on a comparative basis with prior months more accurately reflects the state of the market.

Commentary:

The level of inventory of properties on the market measured in equivalent weeks of sale fell again in June. It now stands at 45 weeks as compared to 47 weeks in May and 35 weeks in June last year. The long term average is around 38 weeks which would indicate that the market is still very much in favour of buyers rather than sellers.

These statistics are the aggregation of all the statistics from across the country. As is well know by those in the industry, real estate is a local business and in an attempt to provide greater insight into the local market the same set of key data – sales, selling price and inventory has been calculated for each of the 19 regions of the country. Check out the factsheet for your local region to see what is happening in your neck of the woods.

North Island

• Northland
• Auckland
• Coromandel
• Waikato
• Central North Island
• Bay of Plenty
• Gisborne
• Hawkes Bay
• Taranaki
• Manawatu / Wanganui
• Wairarapa
• Wellington

South Island

• Nelson
• Marlborough
• Canterbury
• West Coast
• Otago
• Queenstown Lakes
• Southland

Connect is hosted by Inman News – the specialist news service for the real estate industry and its charismatic founder and host of the conference Brad Inman.

This year’s San Francisco event (they are hosted twice a year – New York in January) has just wrapped up and for me as a regular attendee the value of the event never fails to deliver.

A key essence of the event is information overload. The feeling that after 3 days you have been exposed to the largest mass of insight and emerging comprehension of where this industry is heading in the future. There are always (I sense deliberately) more sessions and content than one person alone can consume. That means that after these 3 days I have to sit down and re-read the scribbled notes and digest the learning in order to come up with a picture that has emerged from the conference.

There isn’t a single message promoted as the theme of the conference, but there is always, in summing up the conference an emerging train of thought that can best describe the conference. For me this year that came from one of the final speakers on the last day – Matt Gilligan of SimpleGeo, who made the simple statement that “Location is Context”. A simple statement, but in my mind loaded with powerful inference. For over the past 2 years the emerging role of mobile technologies has grown and grown to the situation where at this conference more than any other preceding Connect conference mobile was all anyone talked about. Mobile is all about location and being location aware is in a broader context a radical paradigm shift for almost all businesses, however for real estate location is at its very core. The phrase “Location, Location, Location” is an international phrase as well known as the McDonalds “I’m Loving it” or Nike’s “Just do it”

A show of hands ably demonstrated the view of the attendees (some 2,000 of them) as to ownership of smart phones (>70%) and iPads (c.15% after just 3 months on sale!). This industry, or at least those at the forefront of technology adoption within it, are embracing mobile as a game changer for the industry. The exhibiting companies as well as almost all presenters talked and demonstrated smart phone apps and iPad apps – next year this portfolio will undoubtedly extend to include Andriod and potentially Microsoft Mobile Window 7.

Another interesting stream of content from the conference of specific relevance to Realestate.co.nz was the whole area of search. A couple of excellent panel discussions and workshop looked at search as the online tool of entry to the real estate marketplace. Providing an unbiased and external perspective was Gary Flake of Microsoft who rightly asked the question; could there be a better way of searching for property? after all the facet based search on price, bedrooms, bathrooms and property type is really a crude way of interpreting the characteristics of lifestyle / lifestage. This theme was picked up by a workshop group who having the benefit of a 24 period to debate and discuss the issue came back with some excellent proposals around leveraging the “Social Graph” to apply all that accessible online information tied up collectively in all your personal behaviours, actions and intent online to better present property that really should suit you.

The practical application being that if you were able to share your key social graph around these parameters – salary = price range; family scale = size of house; age = size of house / location; entertainment likes & activity = location / style of house. All of these clues are bound up in your profile & activity on sites such as Facebook / LinkedIn / Amazon / iTunes / Netflix / your bank account. Now clearly this list includes some very non-public data and as such raises some red flags, but just challenge the concept for a moment to say, if this social graph was inputted through an algorithm to the database of available property on the market as well as alerts to new property, it would certainly provide a richer set of results than just searching for 3 bedroom homes under $500,000 in inner city suburbs of Wellington.

The Connect conference is in many ways a reaffirmation of the fact that we live in a wired (& more so these days wireless) and mutli-connected world and the issues and challenges faced in the real estate market in NZ are so similar to the issues in Europe, US, Australia and Asia, further evidenced by attendees from all the major developed countries of the world represented at the conference. This was further evidenced when set against the hi tech apps and online tools profiled at the conference, a presenter talked of the abandonment rate of telephone inquiries which divert to voice mail and from research how low the return call rate was. It left a sobering reinforcement of the fact that technology cannot replace the human process, but hopefully can make the smarter agents more effective and efficient and enable them to track that performance more accurately as an individual or business owner.

Connect is a valuable event. It has grown from being a US domestic event to become an international event – even noted by many at this years conference that Australians seems to be “everywhere”. I personally was delighted to see a good number of NZ representatives eagerly absorbing the content. It is a conference I would highly recommend to anyone with a conviction to invest in their career in real estate and who recognises the game-changing role of technology in that future.

Great news could be on the horizon, there was a question asked in the closing session as to other locations for hosting Connect. The question was posed by an American, their question was directed at an alternative US location, but the answer from Brad included the inference that they might look at international locations – Beijing and Sydney were mentioned.

To have a Connect in our Asia Pacific region would be enormous and I will share my passion and support to try and get such a conference organized.

In the month 4,575 properties were sold; down on May and also June last year. These figures are released by the Real Estate Institute (REINZ) from submitted sales data from all licensed real estate offices across the country.

Applying this seasonality factor, June sales were down 3.6% on May at a seasonally adjusted level of 4,790. Tracked on a seasonally adjusted basis over the past 5 years clearly shows not only where the market is, but also where it appears to be heading with clear sections highlighted to show trends.

To provide insight to the state of the market as judged in volume terms the chart below tracks June sales for each of the past 10 years. The chart not only shows the relative scale of the market but puts 2010 sales only just above the lows of 2008.

It now seems clear that the 2009 sales recovery was more a bounce back driven by a weakness of pricing combined with a segment of sellers that were forced to sell, 2010 now seems to signal a significantly quieter level of market activity.

Taking not just a single month but a 6 month period assist in removing monthly anomalies and shows how in the first 6 months of 2010 total property sales have totaled just less than 30,000. At 29,844 these first 6 months of 2010 are lower than the first 6 months of 2008 which were only slightly higher at 29,870.

As the chart above shows this level of first half year sales places volume at the lowest level since records began with REINZ back in 1993.

Whilst there is no denying the significant change that has occurred to the consumer attitude to debt allied to property investment and borrowing in general over the past 2 years as a result of the global credit crisis and Great Recession, the impact on property sales seems to be more pronounced than would have been expected by this factor alone. There is strong evidence now borne out by these sales figures that a sector of the property market is either sitting on the sidelines or taking a significant period of time out – this sector being property investors. For looking back their influence on the market in the period of 2002 to 2007 is unmistakable.

However what is interesting in analysing property sales figures is to stack them up against the number of dwellings in NZ to look to what extent the frequency of property turnover has changed over the years. Taking the census data for the number of dwelling as the base in each of the past 18 years and applying the moving average total of property sales presents the following chart with the measure of the % of all dwellings transacted each year.

The last couple of years not only show significant lows as compared to the peak years of 2002 to 2007 but also measured against the more “normal years” of the 1990’s. The current level at 4.2% of all dwellings transacted per year compares to the long term average of 6.3%.

We provide through the statistics from the realestate.co.nz website the NZ Property Report which looks into the supply and inventory of the marketplace – how many new properties are coming onto the market and how much stock of unsold houses are on the market.

To this we also analyse the monthly sales statistics from REINZ as well as the stratified house price index.

It is very clear from the latter statistics, especially volume sales that the NZ property market is either (dependent upon your perspective) in a depressive trough or operating in a new normal.

The chart below summarises the NZ Property market across the best part of two decades. The red line indicating the moving annual total of property sales (right hand axis) with the blue line indicating the value of those transactions (left hand axis).

The latest data to May 2010 shows that in that preceding 12 months 66,769 properties were sold, whilst this is up from the low point of the year to February 2009, when a total of just 53,520 properties were sold, there has been a noticeable recent decline which followed a period of improving sales coming out of that bottoming of sales. Preceding that was the nearly two year decline in sales which took annual sales from 106,243 in the year to April 2007 to the low point in February 2009.

As ever making objective assessments of the future direction of the market is not an exact science and is why many respected economists and academics are reluctant to make such estimates preferring to let the current direction of trends from a variety of sources help point the way; one such set of data being discussed recently has been mortgage approvals.

Mortgage approvals are statistics released by the Reserve Bank, and are collected from a survey of 7 registered banks and provide statistics of the weekly volume and value of new credit lent for the purchase of property. The chart below tracks such data in terms of the weekly number of mortgage approvals on a 4 week moving average for each of the past 3 years.

Very clearly new mortgage approvals are running considerably lower than the prior 2 years. Whilst the fact that they are low would not come as a surprise, what is somewhat surprising is the fact that they should in theory mirror the volume sales of property over the same period. Tracking monthly property sales over the past 3 years on a similar chart as shown below does not produce that mirror image.

This would seem to indicate that mortgage approvals are not exactly correlated to property sales. Reading the inclusions and exclusions of the data from the Reserve Bank does help to provide an explanation.

The mortgage approval statistics include both refinance to another bank as well as where the liability holder changes as in the case of sales to family trusts.

Whilst the specific details are not available it would seem to indicate that the property market is being typified by far less refinance switching between banks and potentially less trust transfers as home owners as borrowers seek to manage their current mortgage, without hunting around for refinance deals. This would be especially true as switching banks for refinance could open up issues such as debt to equity ratios when the property value may have fallen in recent years.

Another factor behind the lower mortgage approvals rate to property sales rate could well be the first signs of “Baby Boomers” selling down properties for which a new property could be funded mortgage free.

As ever richer information in the form of property statistics can be helpful to make better informed decisions in the market, and thereby ensure clarity and comprehension.

Over the first 4 months of 2010 a total of 765 properties have been sold as mortgagee sales – where the owner has defaulted on the terms of the lending agreement and the lender as the mortgagor has sort to recover as much as the debt as possible through a mortgagee sale. This total of 765 compares to 726 for the same period in 2009 and 246 in the first 4 months of 2008 before the Great Recession began.

Whilst the scale of mortgagee sales show little signs of abating the rate of growth seen over the past few years appears to be slowing and the outlook should be brighter in the medium term. A key indicator of the future scale of mortgagee sales is the inventory of mortgagee properties featured on Realestate.co.nz. The chart below tracks the weekly total from 2007 to the present day. Currently there are 279 mortgagee properties comprising homes, units, apartments and townhouses as well as lifestyle properties.

The chart certainly highlights that the peak of the market for new listings of mortgagee properties was back in 2008 & 2009, the calmer days of 2007 are still a long way off.

Another key indicator of the mortgagee market is the degree of searching on the web for mortgagee properties as an indicator of demand from investors or general buyers looking to capitalise on stress in the market to negotiate for a property. The website of Realestate.co.nz tracks all keywords used on the site – some 500+ every week with over 8,000 weekly specific keyword searches. Amongst the most actively searched over the past couple of years have been the phrases around mortgagee property – mortgagee sale, mortgagee auction, mortgagee. The chart below tracks these weekly searches and matches the volume to the weekly inventory of mortgagee property on the market.

Now that the Yuan will become more of a floating currency its appreciation as a function of projected economic growth will improve the overseas purchasing power of Chinese nationals looking for investment options. The domestic property market in China has gone through a boom and this is predicted to drive smart investors to seek overseas options. This could result in more Chinese buyers for NZ property.

Fact / Hypothesis / Wishful thinking? – only time will tell. However it is very interesting to use the power of the property website of realestate.co.nz to examine overseas traffic particularly from mainland China and Hong Kong.

The rich data of a website is perfect as a source to analyse just such a hypothesis – using the IP address analysis it is possible to detail exactly what proportion of all traffic to the site comes from which country and what they look at on the site.

Analysising this data over the past 18 months shows a striking fact – that as the currency exchange rate between the NZ dollar and the Chinese Yuan has risen and fallen so the level of viewings by Chinese and Hong Kong based computers has followed an identical path. This pattern is unique to these markets as the metric is not absolute traffic, but percentage of all traffic. The chart below shows this very clearly.

The red line with the right hand axis measures the value of the purchasing power in NZ dollars of the Yuan, whilst the blue line with the left hand axis tracks the percentage of all visitors to the website each month from mainland China and Hong Kong combined.

As to what this audience is looking at – the answer simply and in some ways not unexpectedly is apartments. The chart below tracks the traffic to just apartments on the realestate.co.nz over the same 18 month period compared to traffic to all listings on the website, on the same scale axis.

The chart shows the percentage of all visitors looking at apartments viewing from mainland China and Hong Kong as the red line which is signifcantly above the same measure for percentage of all visitors looking at all listings on the website as the blue line. Also of note is the significant rise in apartment viewing since late 2009. At the peak in late 208, over 2% of all visitors viewing apartment listings on the site were from China and Hong Kong and the current level of interest is certainly heading that way again.

The summary view of the report for June 2010 is that the market continues to witness a confidence amongst sellers, who are keen to market their properties, and who despite the relative stock of property on the market signal at this stage no further easing of asking price expectation.

A full print version of the NZ Property Report – June 2010 is published below and is available for download (1.4MB) and distribution.

Summary of the market – June 2010

The property market continues to attract sellers, witnessed by the relatively strong level of new listings with 11,106 coming onto the market in June. This level is up 16% on the same month last year. At that time in June 2009 the market was experiencing a listings’ shortage as well-financed buyers where negotiating hard with sellers keen to offload their property as property prices had fallen through late 2008 and early 2009, and uncertainty surrounded the future direction of pricing in a market so accustomed to property price appreciation. This situation is best seen from the perspective of inventory levels – 35 weeks of equivalent sales volume on the market a year ago compared to 45 weeks today.

The asking price expectation has moved little in the past month following the more significant drop between April and May. At the time this was judged to be a pragmatic reaction by sellers eager to “meet the market” in price terms and seek to attract what continues to be a weak level of buyer activity. The truncated mean asking price for June at $410,058 would seem to indicate a staunch position taken by sellers as the revised level they judge to be the “market”, not requiring further adjustments down in price at this time.

As briefly commented upon in last month’s report the budget announcement in mid May regarding property investment had the potential to impact the supply side of the market in terms of new listings in June and July. Whilst the level of new listings in June was up on a seasonally adjusted basis, the asking price expectation change would not be seen as reflective of the impact of rental properties coming onto the market, as this would likely be seen to drag down the truncated mean price whereas the case was that the asking price level edged up in June.

Asking Price

Asking price expectations of new listings coming onto the market rose very slightly in June following the fall in May. This would seem to indicate that sellers recognise the need to price according to the market conditions which show little signs of appreciation.

As compared to a year ago the May 2009 the price was up marginally by 1.7%, however the truncated mean price for the month of June is still 4.4% below the peak of the market back in October 2007.

New Listings

The volume of new listings coming onto the market fell again in June to 11,106 – down 5% from May, however when the expected winter slow down is factored in with a seasonally adjusted factor the true state of the new listings market shows a 5% increase.

Over the 12 months to June 2010 a total of 145,920 new listings came onto the market. This was up 8% on the same 12 months to June 2009.

Inventory

The level of unsold houses on the market at the end of June totaled 51,916 barely changed from the May total. This represented the equivalent of 45.3 weeks, as assessed on a seasonally adjusted basis.

The inventory levels are beginning to fall having risen to their peak in April at 51.6 weeks of equivalent sales.

Regional Summary – Asking Price Expectations

The asking price expectation of sellers in June reflected the current state of the market with only a marginal change following the fall in May.

Across the country the main view is that asking price expectation is coming under pressure with 11 of the 19 regions reporting asking prices which are below the recent 3 month average. The main metropolitan regions of Auckland, Wellington and Canterbury all showed an easing of asking price. There was a notable and significant increase in asking price in the Queenstown Lakes region from $523,760 to $642,710 coupled with a 29% increase in new listings.

Regional Summary – New Listings

As the regional map shows the overall sentiment of the market remains in the territory of a buyer’s market, a full 15 of the 19 regions are showing a year-on-year increase in new listings, with 10 regions posting increases of over 20%.

The larger regions of Auckland, Canterbury, Waikato and the Bay of Plenty all showed year- on-year increases of 10% or less, although the Wellington region bucked the trend with a 29% year-on-year increase in new listings.

Dividing the country up into metropolitan and provincial areas, the metro areas (3 key centers) are experiencing a lower rate of increase in new listings (+12%) as compared to provincial areas (+21%).

Regional Summary – Inventory

The picture of the regional property market is showing signs of changing. For most of the year- to-date the view of the market has been very clearly skewed to a strong buyers market. However as the chart shows there are some easing in the relative levels of inventory around the country.

The chart represents the actual inventory of unsold houses (measured in terms of equivalent number of weeks of sales) by region matched to the long term average (LTA) inventory level. An inventory level significantly higher than the LTA indicates a buyer’s market, with a figure significantly lower indicating a sellers market.

Whilst the predominant sentiment across the country is still to it being a buyer’s market; at this time 6 of the 19 regions are this month moving towards a more balanced market, with the Nelson region clearly bucking the trend with a bias to a seller’s market with inventory below the LTA, sales activity strong and asking price expectation steady.

Lifestyle Property

The steady flow of new listings of lifestyle properties appears to have stalled in June. Having seen 4 straight months with a similar level of c.1,100 listings the new volume of listings in June dropped by 18% to 945. A key contributor to this decline was the Auckland region where a 44% month-on-month decline was seen with just 195 lifestyle listings in the month. Matched to this was Canterbury region with a 32% decline from 147 to 100.

The asking price expectation of these listings though remains strong with an increase (month-on-month) of 14% to $573,893, however the sector does experience variance in asking price due to the sample set and diversity of properties.

Apartments

The number of new apartments coming onto the market in June remained pretty much in line with May with a total of 562 in the month. This represented an 18% year-on-year growth. Looking at the long term trend, the last 12 months has seen a 24% increase as compared to the prior period with the Auckland region as the largest market recording a 26% increase on a 12 month moving average basis.

The truncated mean asking price for the month was $367,216 which was down 5% on the most recent 3 month average and down 15% as compared to June last year. The Auckland region showed an asking price expectation of $331,958, down 6% on the recent 3 month average and 11% down on June last year.

Property Price Index

Comparing absolute house price sale data to listing price expectation is not a like-for-like comparison, however the alignment of trends can be useful as detailed below:

Realestate.co.nz data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 94% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

REINZ: data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.

Notes:

Truncated mean

The monthly asking price for new listings presented in this report utilises the measure of ‘truncated mean’. This measure is judged to be a more accurate measure of the market price than average price as it statistically removes the extremes that exist within any property market that can so easily introduce a skew to traditional average price figures.

The truncated mean used in this report removes the upper 10% and the lower 10% of listings in each data set. An average or mean of the balance of listings is then calculated.

Methodology

With the largest database of properties for sale in NZ, realestate.co.nz is uniquely placed to immediately identify any changes in the marketplace. The realestate.co.nz NZ Property Report is compiled from new listings coming onto the market from the more than 1,160 licensed real estate offices across NZ, representing more than 94% of all offices.

With an average monthly level of over 10,000 new listings, the realestate.co.nz NZ Property Report provides the largest monthly sample report on the residential property market, as well as a more timely view of the property market than any other property report. The data is collated and analysed at the close of each month, and the Report is compiled for the 1st day of the following month. This provides a feedback mechanism as to the immediate state of the market, well in advance of sales statistics which by the very nature of the selling process can reflect activity with a lag of between 2 and 4 months.

In analysing the details of the 11,106 new listings in the month of June, a total of 160 listings have been excluded due to anomalies. The categorisation of Lifestyle property is defined by the land area of the property. The criterion is a property having in excess of 0.3 hectares and being situated outside metropolitan areas.

Background to Realestate.co.nz

Realestate.co.nz is the official website company of the real estate industry of New Zealand, it is an industry owned web business providing online marketing services to the real estate industry. The shareholders in the business comprise the REINZ (50%) and six of the largest real estate companies (50%).

The business operates a portfolio of websites all focused to specialist sectors of the real estate market:

Realestate.co.nz is the heart of the business and is focused to the residential property market. It features the most comprehensive selection of property for sale and rent across NZ. The website attracts a significant monthly audience of over 350,000 unique browsers, with over 110,000 of those visiting from countries outside of NZ.

nzFarms is a specialist website presenting the most comprehensive selection of farms and agricultural businesses on the market across NZ. At this time it features over 5,000 listings for all types of farms and agricultural land as well as over 11,o00 lifestyle properties.

Prime Commercial is a specialist website presenting the most comprehensive selection of commercial property for purchase or lease on the market across NZ. At this time it features over 26,000 listings for all types of properties – retail, commercial, industrial and investment properties.

Prime Business is a specialist website presenting the most comprehensive selection of businesses for sale on the market across NZ. At this time it features over 4,000 listings for all types of businesses – retail, tourism, wholesale as well as franchise opportunities.

Zoodle is a specialist property information website providing very detailed data on all residential properties in NZ. The database comprises over 1.5m properties with detailed specifications, map and local amenities. The site provides online reports for free and for purchase covering valuation and legal information to greatly assist the needs of property buyers and sellers.

The web business of Realestate.co.nz site is the most comprehensive real estate web operation in NZ, currently hosting over 120,000 listings, covering this portfolio of residential property for sale and rent, commercial property for sale and lease, rural properties and farms, as well as businesses for sale. With a subscriber base of over 1,160 offices, the company represents over 94% of all listings from licensed real estate agents in NZ.

The full NZ Property Report for June 2010 can be downloaded here (1.4MB pdf document). Additionally the raw data is accessible here as an Excel spreadsheet enabling anyone to analyse the raw data and establish any trends or observations.

Usage rights are governed under attribution to the source of the data being Realestate.co.nz. The next NZ Property Report for July 2010 will be published on this website on Sunday 1st August 2010 at 10am.

The property market is like any other type of market, there are buyers and sellers, there is available stock and there are sales number and also the ever critical sale price. These are the key numbers we think are critical to follow. Each month we will highlight by region and nationally these key numbers and the picture they are showing.

Property Sales

The number of property sales is a key measure of buyer activity. The Real Estate Institute release this data on a monthly basis from the sales made by all licensed agents in the prior month making this data the most timely and comprehensive. Actual monthly sales data is effected by seasonal factors, for this reason seasonally adjusted data is presented which clearly shows one month to the next if the sales are going up or down.

Commentary:

Sales in May amounted to 5,206 down just a single house as compared to April. As viewed on a seasonally adjusted basis the number of sales turned around having seen a consistent growth from the start of the year, reasons behind this could certainly be influenced around uncertainty surrounding the May budget and future interest rate expectation.

Property Price

The selling price of properties measures that critical balance between what a buyer is prepared to pay and what a seller is prepared to accept. The Real Estate Institute data of prior month sales produces a median price. This raw number is then re-calculated through a model developed in partnership with the Reserve Bank of NZ to create a Stratified Price, which ensures that volume changes in key price segments do not skew the figures.

Commentary:

The stratified price fell in May down from the April figure of $366,925 to the May figure of $361,600 taking prices back to the same level at the start of the year. This clearly shows the market is tight with little immediate pressure on price as sales volumes remain subdued.

Stock of Property

The number of properties on the month is provided from Realestate.co.nz data and measures the level of seller activity in the market. The data represents the total number of new listings coming onto the market each month and is compiled at the start of each month for the prior month and is published in the NZ Property Report. The measure of properties on the market is represented by the number of weeks of equivalent sales, and judged on a comparative basis with prior months more accurately reflects the state of the market.

Commentary:

The level of new listings in May fell, sending the stock of property on the market down from the peak of 52 weeks in April – that was equating to a full years worth of sales on the market. The current level for May at 47 weeks is still high by historical standards. The long term average is around 38 weeks which would indicate that the market is still very much in favour of buyers rather than sellers.

These statistics are the aggregation of all the statistics from across the country. As is well know by those in the industry, real estate is a local business and in an attempt to provide greater insight into the local market the same set of key data – sales, selling price and inventory has been calculated for each of the 19 regions of the country. Check out the factsheet for your local region to see what is happening in your neck of the woods.

North Island

• Northland
• Auckland
• Coromandel
• Waikato
• Central North Island
• Bay of Plenty
• Gisborne
• Hawkes Bay
• Taranaki
• Manawatu / Wanganui
• Wairarapa
• Wellington

South Island

• Nelson
• Marlborough
• Canterbury
• West Coast
• Otago
• Queenstown Lakes
• Southland

This stretch through the dark winter months may be punctuated by overseas warmth, but it is worth remembering that whilst people may not be strolling along the beach they are actually still buying property.

As cited earlier this year in the post “Is summer really the best time to sell a property” there is good reason to try and sell your home through the winter months, as it is not as dead a time as most people think. The simple fact is that the property market does take a slight breather through the June to August period, by no means does it disappear. The chart below very clearly shows the proportion of a total year’s sales by month (red line) matched to the proportion of total year’s new listings by month (blue line).

Both listings and sales do dip during the winter, however the dip in new listings is actually more significant than the dip in sales. Such a gap between the two lines does highlight an opportunity as it provides the ability to make your property stand out against the market, when during the winter there are less new listings coming onto the market.

Now clearly the property market is relatively quiet at the moment as the latest data from the Real Estate Institute showed in releasing its May sales data last week. The total for the month of May at 5,206 was up just one single house sale on the April total, but down over 1,000 on May last year. The seasonally adjusted figures showed a 5% decline between April and May. However the fact is that in May there were still 168 houses sold every day. Over the months of June and July and into August these sales will continue, which will mean that between now and Labour weekend we could see a further 22,000 properties sold. The question is – will yours be one of them?