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NZ Property Pulse – April 2011

Posted on: May 19th, 2011 | Filed in Featured, Property Pulse - Regional Market Report

Each month we publish a factsheet for each region of the country as well as a national report to provide an insight to the key numbers that detail the health of the property market across the country.

These reports for the month of April cover all 16 provincial regions as well as reports covering the 3 main metropolitan regions of Auckland, Wellington and Christchurch. The Auckland report is divided up into each of the main metro areas (North Shore, Waitakere, Manukau as well as Auckland City).

Each factsheet provides the key numbers in table and chart form using the key statistics from the Real Estate Institute of NZ and Realestate.co.nz. This provides the number of property sales in the month, the median sales price for those property sales, the inventory of unsold properties on the market, as well as the number and the asking price expectation of new listings brought onto the market in the month.

 

Metropolitan Areas

Auckland City

North Shore

Waitakere

Manukau

Wellington

Chistchurch

Provincial Areas

Northland

Coromandel

Waikato

Bay of Plenty

Central North Island

Hawkes Bay

Gisborne

Taranaki

Manawatu / Wanganui

Wairarapa

Nelson

Marlborough

West Coast

Otago

Queenstown Lakes

Southland

National Property Pulse

The national NZ property pulse factsheet for April 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales across the country 4,987 in the month showed no growth on a seasonally adjusted basis in April but remain 4% below the levels of sales a year ago. The inventory of unsold houses on the market at 53 weeks of equivalent sales  continues to sit well above the long-term average of 41 weeks.

The stratified mean sales price for property sales across the country at $365,593 is exactly the same as compared to a year ago, but has shown growth over the prior 2 months. The asking price expectation of new listings though rose in April to a new record high of $429,249, which is 2% up as compared to a year ago.

The level of new listings coming onto the market in April at 10,181 was down significantly from March and down 17% as compared to a year ago.

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Property searching on mobile is a clear winner

Posted on: May 13th, 2011 | Filed in Buying / Selling a home, Featured, mobile, Website searching

I was very interested to read this week of the performance of the Trade Me iPhone app. In a very open manner they shared their data with the NBR. This naturally prompted me to examine the data from the Realestate.co.nz iPhone app after our first 5 months of operation.

As far as uptake is concerned in excess of 1 in every 10 iPhone owners has now downloaded the app, a total exceeding 25,000 downloads since we released the app in November. Every day we continue to see over 100 new users discover this great way to discovery property for sale right around them.

Trade Me’s app was launched at the same time, and in that time they have had over 110,000 downloads. Like Trade Me we had modest expectations of around 12,000 to 15,000 downloads within 6 months; so for us 25,000 for such a specialised app as compared to Trade Me’s app which covers such a diversity of content, is really encouraging.

This strong adoption of real estate listings search on the iPhone is reflective of a global trend which has seen over 1 million downloads of the UK real estate website Rightmove iPhone app and across in Australia over 180,000 for Realestate.com.au iPhone app.

The most developed market in terms of mobile usage for property search is the USA – there the #1 property portal Zillow.com reports not only downloads exceeding 3 million, but the level of engagement of buyers with property listings on the mobile platform is fast approaching a third of all viewings. For Realestate.co.nz we see that in the past month 10% of all property listings views are made via the iPhone app with a further 2% being on the mobile web platform across a number of mobile devices including Android and the iPad; this after just 6 months, shows how important the mobile platform is to the experience of looking for property to buy.

Another very interesting insight in the usage of the mobile device is the heavy usage at the weekend. Whereas the web usage has higher activity during the week the iPhone is clearly a weekend tool – part of the open home toolkit for a Saturday morning allowing active property hunters to drive around the areas checking out what is on the market or sitting in a cafe between open home visits.

In terms of usage the iPhone is clearly not a tool limited to the inner city suburbs, in the month of April over 90% of all listings of property on the iPhone were viewed by property hunters – that is a figure which has grown progressively over the past months as the penetration has gown and usage has extended to every corner of the country.

Clearly we see the iPhone app (and future Android app) becoming a critical platform to provide property hunters with a great experience to aid the process of finding that perfect property. We have new developments and functionality planned for the next few months and will keep improving the experience. With a dedicated audience of over 25,000 we are fully committed to this sector of the market.

 

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NZ Property Report – April 2011

Posted on: May 1st, 2011 | Filed in Featured, NZ Property Report

The April 2011 NZ Property Report published by Realestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of April. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 95% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – April 2011 is published below and is available for download (1.3MB) and distribution.

Summary of the market – April 2011

The NZ Property market certainly is showing signs of renewed activity, far from the levels of the mid 2000’s the current activity is measured and very much centered on the Auckland region. Whilst in overall terms the level of inventory weighs heavy on all regions the levels of sales reported in March show that buyers are certainly back in the market and beginning to clear some of this high inventory.

By the nature of the way inventory is reported (actual stock divided by 3 month average sales) the very low levels of sales in January and February is in some way holding back the reporting of this trend of greater activity. It is likely that with the reporting of the April sales that the next inventory report for May will show a significant fall in inventory levels of unsold houses.

The market amongst sellers is certainly not showing any impact of inventory levels, as a function of such seller confidence the national truncated mean asking price has risen in April to a new record high of recorded stats going back to the start of 2007.

As a further lead indicator to the market, the levels of new listings continue to track well below prior year. In fact we have seen 10 consecutive months of falls in listings numbers year-on-year.

Asking Price

The truncated mean asking price for all new listings in April rose to establish a new peak at $429,249 up from $421,940 in March. On a seasonally adjusted basis the asking price rose 2% in the month indicating a continued confidence amongst sellers.

The trend of the past 2 years shows continued strength in asking price expectation.

New Listings

The level of new listings coming onto the market in April fell to 10,181 in April. This represented a 17% year on year decline and an 8% seasonally adjusted decline from March.

On a 12 month moving basis the number of new listings in the past year totals 129,678 as compared 142,635 for the same period a year ago – a fall of 9%.

Inventory

The level of unsold houses on the market at the end of April continued to fall from prior months. April reported 50,398 down from 51,980 in March and 52,672 in February.

This steady decline in the physical number of new listings is not being reflected in the representation of inventory as measured in rate of sales as the recent 3 month period (Jan – March 2011) contained two of the lowest sales months recorded.

Regional Summary – Asking price expectations

The national asking price rising to a new peak at $429,249 was mirrored across the country as can be seen from the chart with a significant growth in all but 2 regions. The highest rising region was Otago which with a 12.5% increase to $298,817 has itself hit a new peak of asking price.

The Auckland market at $555,572 whilst not quite hitting the peak, continues to track at all time highs close to the peak set in December 2010 at $564,853. The April asking price was up 5% on April last year and showed a 1% seasonally adjusted rise from March.

Those regions that showed falls, Bay of Plenty with a 3% fall and the Central North Island with a 7% fall, both had seen strong asking prices through the latter part of 2010 and into early 2011.

Regional Summary – Listings

The picture for new listings across the country continues to show that there is weakness in bringing new properties to the market. There were 13 of the 19 regions that reported new listing down on prior year with 6 reporting falls of over 20%; both Coromandel and Southland over 40%. The former region has been suffering under a significant weight of inventory of unsold houses for many months.

In the main metro areas listings are low with the impact of the earthquake restricting new listings in Canterbury (down 32%), Wellington was weak with just 741 new listings, down 29% and Auckland down 17% with 3,325 new listings.

Two regions did see very strong growth in listings; of particular note was the Queenstown Lakes area which saw a raft of new listings including a large collection of apartments.

Regional Summary – Inventory

The regional map of inventory of unsold houses shows a very consistent picture of high inventory in all but the one region that of Auckland. This scale of inventory at levels well above long term average is very much a function of very low sales at the start of the year which despite the actual fall in properties on the market is making the evaluation of the market point to very high inventory based on rate of sale.

The Auckland market is very much on the boundary of moving from a buyer’s market to one favouring sellers. The Auckland market has seen a reduction of properties on the market from around 14,100 just before Christmas to currently 12,376.

Around the rest of the country the inventory levels reached new peaks in the Hawkes Bay, Manawatu/Wanganui, Northland, Otago and Southland.

Lifestyle

The level of new listings of lifestyle property coming onto the market in April fell just 1% on a seasonally adjusted basis from March. A total of 1,032 new properties were listed with a truncated mean asking price of $571,611. The asking price was up 5% as compared to the recent 3 month average, but up just 1% as compared to prior year.

On a rolling 12 month average basis new listings are down 4.5% with 11,764 listed in the past 12 months compared to 12,314 last year.

Apartments

Listings of apartments showed a 9% rise on a seasonally adjusted basis as compared to March with 452 new apartments coming onto the market. The truncated mean asking price for these new listings was $399,927 which was up 8.5% on the recent 3 month average, but down 4.1% as compared to April 2010.

In the Auckland apartment market which represents over 60% of the market there were 285 new listings with an asking price of $350,306. The new listings shows a rise of 24% on a seasonally adjusted basis, although when judged on a year-on-year basis they are down 22%.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted 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 95% 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 1,020 licensed real estate offices across NZ, representing more than 95% 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 10,181 new listings in the month of April a total of 127 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 400,000 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 around 5,000 listings for all types of farms and agricultural land as well as over 11,000 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 27,000 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 4,300 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 1.6m 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 1,020 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.

The full NZ Property Report for April 2011 can be downloaded here (1.3MB 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 May 2011 will be published on this website on Wednesday 1st June 2011 at 10am.

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The wish list of property seekers

Posted on: April 28th, 2011 | Filed in Buying / Selling a home, Featured, Home features, Website searching

This week we have been extending the testing of our new beta site for Realestate.co.nz. In opening up access to a wider audience we have encouraged people to share with us the things they like about the new site, as well as those areas where we could do better!

Such an exercise is tremendous in opening up a dialogue with our users. To date we have received 116 emails. Reviewing and replying to them has been an enlightening and enjoyable experience as I have certainly gleaned a great insight into not only how they feel about the site, but also the things that as active users of our site they would love to see us do more of.

Overall we seem to have developed a site design and functionality that judged on this sample group is a positive step forward.

As well as functional feedback it is really interesting to hear of the things that people most want to be able to find on a website. Taking a simple poll of these comments I have tabulated the top 5 things people would most like to see on a real estate site.

Map based search

This is by far and away the greatest demand from our users and thankfully this is something that the new site delivers to the massive satisfaction of this audience.

Many have commented as to the excellent value and experience of the iPhone app that we launched at the end of last year (now exceeding 24,000 downloads to date and growing!). That user experience seems to so many people so intuitive that we had to bring it to the web.

A comment made by all the people was the extent to which they were surprised and disappointed that Google had ceased to offer this service. Now we can step in to fill this void and provide a vital way of display property for sale as seen from an aerial view perspective. Or as one email commented – “show the properties exactly where they are, rather than where the agent would like to have us think they are!”

CV

It is clear that richer data is expected by users of real estate website and the data that most frustrates them is the access to the CV or rating valuation. This is seen as a “must have” and as many quote – the data is accessible from most council websites.

The fact is we would love to add this key fact to listings on the website, however whereas a single query can provide the CV for a single property for free via a council website, to enable us to provide this for all properties requires access to a database for all properties. This is a service for which we would have to pay a significant license fee to local authorities or to QV who acting for these councils undertakes to provide the data.

Definitive price

This response (can we please have a price on every listings) is not news to us. Ever since we started the website in 2006 we have had constant comments and questions as to why we cannot get or encourage agents to provide a price on every property. Users of the site are vocal in their view that a price or a price guide would vastly improve the user experience. Many go as far to state that they completely ignore properties for which there is no displayed price – arguing that they have no confidence that the appearance of a property in the search results may not be a true reflection of the expected price.

We do share with these people that the listings we receive must be provided with either a display price, a search range or more common these days a non-display search price. We need to ensure that property listings for a filtered search price genuinely reflect the true range of the property for sale.

Land and building size

People generally believe that the size of a section or the size of the property should be as standard a set of data as the number of bedrooms or ensuites. It is hard to argue with this assertion as all properties have a legal title that defines the section size. As to building size this is certainly less easily available. To assist in this area we do integrate listings with property database of Zoodle which often provides section and building size. Where we can (accurate addressing of the property) we link directly from Realestate.co.nz to Zoodle.

Representative images

Interestingly a few comments were made as to the “authenticity” of some property images. The perspective was that photographers had been known to use certain types of lens to be – how it might be called “more generous” with the size of rooms when taking pictures.

Whilst we do not actively get involved in the production of photos (we simply display those images we are given) we are always delighted to see the general trend to have more photos, better quality photos and bigger photos. It is funny to think back 5 years ago when we started the website the average listing had just 4 photos and the size was tiny. Today the average has shot up to 16 and the size grown significantly.

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Are signs of economic stress leaving the property market?

Posted on: April 21st, 2011 | Filed in Featured, Online marketing

Nearly two years ago I wrote a post asking the question “Have signs of distress left the property market?” – in retrospect this was a bit of an early call as since that time I am not sure we would collectively feel that we have yet got over the worst.

That article was written to analyse the searching behaviour of people using realestate.co.nz to seek out properties that were being sold with signs of distress and desperation as a function of the very severe economic conditions brought on by the Global Financial Crisis and our own recession.

Bringing this analysis up to date provides a perspective that things have improved – and some things have not!

Back in 2009 we examined 4 keywords that were being used in searches which we judged reflected an interest by eager buyers to find properties where the owners where suffering and in need of a fast sale. These words were: Motivated / Urgent / Desperate / Must Sell. The chart shows the tracking of the total for these 4 keywords over the past 2 years.

Clearly the searching for these keywords has fallen off – both in absolute terms (blue line) and as a proportion of all searches (red line). From the highs of 2009 when the rate of these searches was up to 150 per week the scale of such searches has calmed down to a level of less than one in every 200 searches.

However what is interesting is comparing the level of properties on the market which include these keywords.

Back in January 2009 there were 93 listings on the site using the word “Desperate“, 6 months later this had fallen to 67, now in April 2011 this is number is still 67!!

The phrase “Must sell” has 3,269 listings in January 2009, falling to 2,527 in July 2009 and today back up to 3,444!

The keyword “Urgent” showed up on 436 listings in January 2009, falling to 344 by July 2009 and today – up to 386!

The keyword of “Motivated” showed up on 1,377 listings in January 2009, falling to 1,080 by July and again today it has risen to 1,477.

So it would seem that whilst the urgency of buyers to seek out properties whose vendors are experiencing pressure of mounting financial stress has declined markedly over the past 2 years the use of these key emotive phrases by real estate agents on behalf of clients has not diminished.

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NZ Property Pulse – March 2011

Posted on: April 18th, 2011 | Filed in Featured, Property Pulse - Regional Market Report

Each month we publish a factsheet for each region of the country to provide an insight to the key numbers that detail the health of the property market across the country.

These reports for the month of March cover all 16 provincial regions as well as reports covering the 3 main metropolitan regions of Auckland, Wellington and Christchurch. The Auckland report is divided up into each of the main metro areas (North Shore, Waitakere, Manukau as well as Auckland City).

Each factsheet provides the key numbers in table and chart form using the key statistics from the Real Estate Institute of NZ and Realestate.co.nz. This provides the number of property sales in the month, the median sales price for those property sales, the inventory of unsold properties on the market, as well as the number and the asking price expectation of new listings brought onto the market in the month.

Metropolitan Areas

Auckland City

North Shore

Waitakere

Manukau

Wellington

Chistchurch

Provincial Areas

Northland

Coromandel

Waikato

Bay of Plenty

Central North Island

Hawkes Bay

Gisborne

Taranaki

Manawatu / Wanganui

Wairarapa

Nelson

Marlborough

West Coast

Otago

Queenstown Lakes

Southland

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Recessionary stress still felt in number of mortgagee properties for sale

Posted on: April 11th, 2011 | Filed in Buying / Selling a home, Featured, Money Matters

Whilst there maybe some signs of the recovery that most people have been longing for, one of the well known “lag” indicators – mortgagee property repossessions continues to make its presence felt in the NZ property market.

At this time there are around 280 properties on the market in NZ  (covering both residential and lifestyle properties) identified as being in foreclosure where the lender is forcing a sale as a result of the borrower being in arrears on the repayment of the loan or the borrower has signaled to the lender their inability to continue to pay and is therefore looking to exit the property.

There has not been any recent statistics released as to the scale of mortgagee sales since late last year, so in an attempt to shed light onto this sector of the property market we have examined key data from the website of realestate.co.nz.

Reviewing the current state of the market, the absolute scale of mortgagee properties is well below the peak of 2008 and 2009 when close on 400 properties were being marketed in this manner as shown from the chart below.

In absolute terms 280 properties is a significant number, however when put into context it represents less than one half of one percent of all the properties on the market in NZ for sale today – put another way it is only 1 in every 200 properties is a mortgagee sale. Even at the height of the recession the total only ever reached 0.75% of all listings.

This figure is far lower than the close to 10% of US properties that were in foreclosure in the peak recession period of 2008/9 – a situation that is yet to be resolved in many US states where the continuing levels of mortgagee listings and sales continues to drive down the sale prices.

Examining the past 3 years it would be fair to say that the trend for mortgagee listings is on a slow decline. It will likely take a considerable period for all the effect of the Global Financial Crisis and its impact on the NZ property market to work its way out of the system as far as mortgagee listings and for the level to return to the rate of around 100 at anyone time.

Another key indicator of the mortgagee sector of the property market is the use of the keyword search terms on realestate.co.nz as a means to locate mortgagee property. Over the past 3 years we have tracked this each week and the latest chart below shows the recent year.

Clearly the  peak of activity of keyword searching for terms such as mortgagee sale / mortgagee auction / mortgagee properties was back in 2008 and into early 2009. The recent 12 to 15 months has seen this fall away to a fairly steady level. That level is still resulting in these terms being in the top 5 terms searched on the site.

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NZ Property Report – March 2011

Posted on: April 1st, 2011 | Filed in Featured, NZ Property Report

The March 2011 NZ Property Report published by Realestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of February. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 95% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – March 2011 is published below and is available for download (1.3MB) and distribution.

Summary of the market – March 2011

Any analysis of the NZ property market for March would be incomplete without reference to the impact of the Christchurch earthquake. The Canterbury region is the second biggest property region representing around 15% of the market. In March the level of new listings in the region fell 36% compared to a year ago, whilst the country excluding Canterbury fell only 11%. Based on a representation of the national total it is likely that around 480 less properties were listed in the Canterbury region in the month than would have been anticipated at this time of year.

Nationally the rise in asking price was the most significant single piece of data from the overall report. The asking price nationally is now hovering close to all time highs and is particularly strong in the major cities. Auckland at $551,720 is up 1% as compared to prior month and prior year; with Wellington at $453,021 up 2.5% on last year and 1% from last month. Canterbury at this time shows no significant change in price in line with recent 3 month average.

The level of inventory of unsold homes on the market continues to grow, recording its 3rd consecutive month of rise to break through the psychological level of one year, reaching 53 weeks. Given this high level of inventory, matched to slow levels of new listings it is becoming clear that the high asking price is more likely to be the result of keen interest focused purely on new listings; leaving older listings somewhat “languishing on the shelf” at what could be unrealistic prices or presentation that needs refreshing to attract buyers.

Asking Price

The truncated mean asking price for all new listings in March rose again to $421,940 up from $420,265 in February. On a seasonally adjusted basis the asking price rose 1% indicating a continued confidence amongst sellers.

The trend of the past 2 years shows continued strength in asking price expectation.

New Listings

The level of new listings whilst rising in March was still 15% down compared to March last year. The current 12 month moving average total shows 131,722 new listings down 6% as compared to the prior 12 month period. The market continues to remain quiet in terms of listings and sales as has been seen in the REINZ sales reports for the last few months with both January and February reporting record lows. February sales totaled 4,502.

Inventory

The level of unsold houses on the market at the end of March actually fell from 52,672 in February to 51,980 in March. This represented the equivalent of 53.1 weeks of equivalent sales, as assessed on a seasonally adjusted basis.

The key driver of this rising inventory is more a reflection of somewhat lackluster sales than excessive new listings. The absolute level though at over a year of equivalent sales will continue to impact the market and maintain the “buyers-market” perspective.

Regional Summary – Asking price expectations

With a strong national asking price growth of 1.9% as compared to the recent 3 month average, the expectation would be to see a consistent trend across the country. The fact is that 11 regions of the 19 did post rises in asking price, however there were some significant falls. The majority of the falls were in provincial regions.

Both Wellington and Auckland saw asking price rise close to peak, with Wellington particularly strong with a 4.1% increase to come within $2,500 of the peak asking price indicating confidence in vendor expectations.

By contrast the situation in Northland and Marlborough, which both showed significant falls in asking prices taking those regions to record low asking price levels.

Regional Summary – Listings

Recent months has seen a consistent decline in listing numbers when judged on a year-on-year basis, this month of March shows some change.

Four regions posted an increase in new listings with Waikato the standout showing a 9% increase to 994 new listings, the highest level in over 3 years.

As previously noted the Canterbury region saw a 36% fall. Over the past 7 months since September a total of 8,558 new listings have been brought to the market across the region. This is down 30% from the 12,232 recorded in the same period in the prior year.

Wellington regions showed a strong performance with a 6% increase. This region has been active with increases consistently over recent months taking the 12 month average up 6% on the prior year.

Regional Summary – Inventory

A consistent picture of high inventory of unsold house on the market pervades the region map. There are pockets where levels are moderate, particularly in Bay of Plenty and Central North Island, however the remainder sit well above long term average.

Of the 19 regions a full 8 of them are now sitting at record high levels of inventory – Central Otago, Hawkes Bay, Manawatu / Wanganui, Nelson, Northland, Otago, Taranaki and the Wiakato.

In total provincial NZ which comprises all of the regions excluding the main centres of Auckland, Wellington and Canterbury reached a record peak of inventory of 76.7 weeks which compares with 36.6 weeks in the metropolitan areas.

These record highs as noted earlier are as much a factor of slows sales, are clearly offering a broad range of options to buyers active in the market.

Lifestyle

Lifestyle property performed fairly strongly in respect of new listings with a total of 1,096 coming onto the market in March up 17% from February and in line with March last year. The asking price expectation fell by 2% in the month from $552,591 to $542,975 which was down 8% as compared to March 2010.

Despite the overall levels in Canterbury lifestyle listings remained steady with 130 new listings as compared to 144 in March 2010, the reality would be that almost all of the lifestyle properties in the region would be well outside of the immediate vicinity of Christchurch city.

Apartments

Apartment listings grew in March but at 516 failed to reach the level of 613 seen a year ago. Based on a 12 month moving average volumes of apartment listings continue to fall with 6,216 in the most recent year down 9%. In Auckland the trend is down with 5% decline on a 12 month moving average basis. March saw 332 new apartment listings in Auckland down 8% from a year earlier.

The asking price expectation rose 4% in March from $365,150 to $378,494. This level though is down 3% as compared to a year ago and down 4% as compared to the recent 3 month average. Auckland apartment listings reflected a similar trend down 4% year-on-year.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted 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 95% 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 1,020 licensed real estate offices across NZ, representing more than 95% 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 12,247 new listings in the month of January a total of 156 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 400,000 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 around 5,000 listings for all types of farms and agricultural land as well as over 11,000 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 27,000 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 4,300 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 1.6m 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 1,020 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.

The full NZ Property Report for March 2011 can be downloaded here (1.3MB 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 April 2011 will be published on this website on Sunday 1st May 2011 at 10am.

12

The stress and pressure of home buying

Posted on: March 28th, 2011 | Filed in Buying / Selling a home, Featured

Continuing this series of blog posts providing an insight into the experience of house hunting and buying. This is the 3rd and concluding part and follows “Sharing the experience of house buying” and the “Open homes and property data – the DIY of home buying”.

Selling method

The chosen method for selling this particular property was an auction.

Our current situation is that we own our own house, however at this time we have not placed it on the market. This situation I would guess would not be uncommon, as many people start by “watching the market”, waiting for the possibility of a property that really excites them to come onto the market; and at that point make the move to list their house for sale.

Our property is in a ready state to be put on the market. We had spoken with a local agent who had assessed our property and judged that we could very likely find an interested buyer in the current market, at a price which would afford us sufficient funds to buy this new property we had found. However this situation of not being “cashed up” meant that an auction was not our preferred approach to buying this house; it was however the chosen method of selling advised to the vendor of this house by the agent.

Whilst an auction did not suit our particular situation, this sale process does have is advantages and disadvantages. Clearly it’s attraction lies in the fact of the commitment it forces upon serious buyers to bid unconditionally and thereby guarantee a sale for the vendors. However the downside of an auction as is typified by our circumstances, is that it can potentially restrict the potential pool of buyers to just those who are financially in a situation to bid. A committed bidder needs to be in the full knowledge that if they are the successful bidder, they will need, immediately upon the fall of the auctioneers hammer, to sign an unconditional binding agreement to buy the property and write out a cheque as a deposit for 10% of the sale price.

Our situation was that whilst we could not bid on the property, we could offer a price which in our judgment would be a good price as compared to the market value. It is true that we could have presented a conditional offer to the agent prior to the auction; however we were reluctant to do this, as to do so was in our judgment revealing our hand. Our preference was to be patient and see if the auction surfaced a bidder sufficient to reach the vendor’s reserve.

As an added point of reference in researching this property, we did undertake a Google search of the owners. Their details were on the title to the property, which is public record. In some cases the title records a family trust which can limit such reseaerch. There is nothing illegal or even immoral about this action – we sought to find out public information about the owners – information which in our judgment could be helpful in appreciating any circumstances surrounding the sale, should that be available. I will not disclose the facts that we discovered; however what I will say, is that we discovered facts that in our judgment could have been a factor in why the owners were selling.

In the week leading up to the auction we did become resigned to the fact that as we could not bid at the auction, in which case our chosen strategy was to attend the auction with the express intention of viewing the outcome, and if the property was “passed in” with the reserve not met, then we would act to introduce ourselves to the agent as conditional buyers.

One thing that did surprise me in that final week leading up to the auction was the lack of a follow-up call from the listing agent. I would judge that we had made ourselves very conspicuous as potential buyers. We had visited the open home 4 times over the period leading up to the auction. We had completed the open home book each time and after the 3rd visit the agent greeted up warmly by name. So the agent knew who we were; had our full details including my business card and also knew where we lived. Despite all of this, except for a single telephone call after the first open home, we were never contacted again by the agent to ascertain our interest in buying, nor clarifying our situation. No email or call. That did surprise me, as I was sure we would have been seen as good prospective buyers.

Taking it one stage further given the information we had shared, the agent could potentially have undertaken some due diligence on us, given the knowledge of our address and contact details. Some Google searching and property record reviewing which all agents have access to would have helped profile us. All public information open on the web.

The Auction

The day of the auction arrived, as did a good turnout of locals. There is always that wonderful sense of uncertainty looking around at the people attending an auction and wondering if that person is a buyer or an interested observer and also who is the owner as they need to be there on the day. In total the on-site auction attracted around 20 people.

The auctioneer provided as usual, a summary of the property and went on to state the terms of the auction. Within this latter statement, he made a comment that completely surprised me.

Now whilst in attending a few auctions over the years I have been made painfully aware that the successful bidder would need to sign an unconditional agreement and pay a deposit of 10%, I had never heard the statement made at this preamble to this auction to say “that as had been agreed with the vendor some of the bidders had pre-negotiated variances to the terms of the deposit and the settlement date”. This was a surprise to me. Now maybe this is a recent change, but I did not know that there could be any terms that were negotiated. I do appreciate that the basic term of unconditional purchase would always still apply, but a delayed settlement might have been an option we may have been interested in. Anyway I chalked that down to experience.

To present the exact process of the auction I am keen to share the actual bidding and negotiation, however rather than detail the actual bids (which potentially could disclose the property) I will use numbers based on indexing the actual numbers to the current median price of property sold in NZ in February 2011 – $350,000.

So I will start by “disclosing” that the property was sold at a price of $350,000.

The auction began slowly with very hesitant bidding at levels well below the CV. The equivalent CV would be $285,800 and the first bid was for $264,000.

As ever (well from my very limited experience at least) those people who bid first at auctions tend not to be the ones who buy. In this case a new bidder entered the process at the second closing call and for a further 5 minutes the bidding crept up well above CV reaching after many tortuous assumptive closings by the auctioneer a price of $334,000.

At this point the auctioneer called for a 3rd and final time and passed the property in for negotiation between the highest bidder and the vendor.

After 15 minutes of protracted discussions and separate negotiations between the parties facilitated by the auctioneer the “stage” was reset with the auctioneer announcing that the property was now on the market at the price of $350,000. The auctioneer proceeded to await any counter bids, not a word was said and the hammer fell at the sale price of $350,000.

The Conclusion

So how did we feel at the end of this process?

I have to say surprised. We made some private bets as to the level of top bidding and the reserve. We felt that the bidding would not reach $350,000. Also we were sure the vendor had a higher expectation of sale price and had set a reserve at $387,000!

I can with full honesty say that we would have paid $370,000. We would have made that as a conditional offer on selling our house. I would go even further and say that we would offer that today if the property came back on the market. Additionally there may have been another conditional buyer out there like us who may have paid even more than we would have paid – maybe not, but we will never know. The property is sold, the vendor moves on and the new buyer moves in and the property market chalks up another sale in March 2011.

So what does this detailed insight into the buying process highlight? Well, as I have said from the start this process was not a piece of research, I was a genuine buyer and that is the standpoint upon which I make these comments. So in this situation the vendor could have potentially received more money for their house. That extra would have come with conditional risk which the difference in price may not have justified.

The whole process has heightened my awareness of the scale of research required in the process of buying a house. The process has also reaffirmed the appreciation of the emotional roller coaster associated with the process of buying a house. It has also I hope helpfully highlighted to real estate agents some of the issues and behaviours of buyers which they could take note of to enhance the marketing and services to buyers.

As to the future – well we will probably keep looking! – and researching.

10

Open homes and property data – the DIY of home buying

Posted on: March 22nd, 2011 | Filed in Buying / Selling a home, Featured

The open home - NZ property buyingContinuing this series on “Sharing the experience of house buying” in which I am keen to provide a first hand experience of home hunting and buying.

The Open Home

A house is exactly the same as any other product you buy – a car, a sofa or a piece of clothing. You want to be able to touch and feel the merchandise and in the case of a car – take it for a test drive. In the case of a house the “open home” is the opportunity to do a virtual test drive (although in the UK a couple of years ago there was a more immersive experience offered!).

An open home on a summer’s day is a sure-fire way to ensure you get a large number of people to come and view the property, and for this property it appeared that the whole neighbourhood had turned out judging by the hundreds of pairs of shoes on the front porch.

An open home allows for that voyage of discovery as you begin to see how those photos accompanying the online listing fit together as you move through the house.

Returning to the house for the second open home on the Sunday amazed us as to the extent of detail we had completely overlooked on the first viewing – good bits and bad. The other tactic of the second visit was to use my iPhone with its Realestate.co.nz app to capture specific photos not provided as part of the photos on the listing – I took over 60 additional photos to provide a rich visual record for later review.

During the visit I asked the agent if there was a floor plan for the property, either as a service provided by the likes of Open2view or as any property file records – unfortunately I was informed none was provided for this property.

Floorplans

Later on back at home armed with the now more extensive photo library we sketched out what we could recall of the plan for the house; in this way helping us better assist in visualizing the potential of the property in the context of where furniture might fit as well as which rooms we could use for what use (we are fortunate in not having children at home).

The exercise certainly left me with a clear view that floor plans are now a necessity for property marketing and yet are the rare exception in NZ. The ability to be able to sit comfortably at home and review the layout with contextual photos should be a basic part of all property marketing.

To help me I quickly found an online free tool to provide the ability to draw a floor plan which took so little time but offered such great reward.

Now with a more detailed floor plan of the house I set about collecting more data to assist in a more detailed research of the property.

Property data

The first set of data to purchase was a report from Zoodle which for $24.95 provided a comprehensive summary of 20 recent sales of similar property in the area surrounding the house.

This report shone a bright light onto the list provided by the real estate agent. Their list showed 10 recent sales of property in the area. What was glaringly obvious was the omission of a property which was just 4 houses up the street. This property had sold 12 months ago and then resold 3 months ago. The omission of this property from the report provided by the real estate agent called into question the value of the agent’s report.

The second purchase I made online was a full property report from the local authority. Auckland Council (which now covers North Shore City) provide an online service which for just $26 provides a very comprehensive folder accessible and downloaded online. The turn around time is next working day and can be accessed as an online download or for $10 more can be couriered as a CD Rom. The property report tends to include consents, applications, plans, reports, photos as well as any code compliance for project work. Availability to such reports will vary by property and by local authority around the country, but it is certainly worth checking out.

This property file was invaluable in dating the key projects which had been undertaken on the property as well as some great floorplans from many periods over the past couple of decades. So much data, so readily available – all online.

Over the next week leading up to the auction date we sat down and planned out our thoughts about the appeal of the property as well as what we thought it was worth in today’s market.

Property valuation

Assessing the true value of property is a complex matter. The only true measure of value is what a person is prepared to pay for it. The fact is that property is not frequently traded and therefore there is no defined liquid market which allows market pricing to be accurately monitored.

Valuation estimates are available online which can provide a guide. The definitive valuation (as required by a bank for lending purposes) comes from a registered valuer, this type of valuation is charged based on the value of the property and can cost anything up to a $1,000. In our case we chose to use the online report service offered by Zoodle. For $49.95 you get an estimated valuation of a property, the report states a confidence factor as to the valuation as well as a valuation range. It also provides evidence to support the valuation, which is based on recent sales of similar properties, it evaluates the relevance based on location proximity to the property, the similarity of the property based on land area and house area and also rateable value.

In the case of the house we were interested in the estimated valuation on the Zoodle report was in excess of the current rating valuation, not a surprise to us as recent sales in the area had sold at anywhere from 10% to 35% over the current rating value.

Coming up – The Auction

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