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NZ Property Report – October 2010

Posted on: November 1st, 2010 | Filed in Featured, NZ Property Report

blue pen and small houseThe October 2010 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 October. 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.

The October 2010 report follows a similar story to that of the past 3 months as the market has moved into what is traditionally a strong spring listings peak. As with sales the level of new listings continues to be well down on 2009 levels as well as slightly down on 2008 levels – a time when recession and global volatility inn credit upper most in consumers minds. The overriding issue in the market is the level of unsold houses which continues to offer buyers choice but is challenging for sellers competing with so many alternative properties. The theoretical impasse to this situation would normally be a weakening of prices, this is certainly not shown by the latest month’s expectation of asking price which rose again.

Realestate_DownloadNowA full print version of the NZ Property Report – October 2010 is published below and is available for download (1.3MB) and distribution.

Summary of the market – October 2010

Cover page - NZ Property Report - Oct 2010The month of October is traditionally the 4th highest listings month – a key time as sellers, keen to capture the start of summer list knowing that the run up to Christmas is sufficient to ensure a transaction close before the year-end. This year that peak has been somewhat subdued. Total listings at 11,911 even allowing for the factor of continuing weakness in the Canterbury region was down significantly on last year (12% down) and on a seasonally adjusted basis 1% down indicating that the scale of the seasonal uplift was equally subdued.

The key factor in the market continues to be the level of sales which is the reason for the significant high levels of unsold houses on the market which is now edging ever closer to a full 12 months worth. Sales over the past 4 months have been stuck within a very tight range of 4,300 to 4,400 with no appreciable seasonal movement. These sales levels are very comparable with the same period in 2008 when this situation went on for over 10 months until the market saw activity as prices eased and inventory was cleared.

In terms of asking price expectation, sellers are certainly indicating that their view is that property prices do not need to adjust, rather the opposite having seen a further rise in asking price in October from $411,745 to $420,451 which is a significant monthly rise – 4% increase on the recent 3 month moving average and up 0.4% as against October 2009.

Asking Price

Asking_price_chart_Oct_2010The truncated mean asking price for all new listings in October was $420,451, this compares to $411,745 last month and $418,759 in Oct 2009. The market tends to see asking price rise in the spring accompanying the rise in listings. The key issue is that with the high levels of inventory the strength in asking price is counter to the market trend which was seen in 2008 when prices softened.

The current asking price is now closer than ever (just 2% behind) the peak of the market back in October 2007.

New Listings

New_listings_chart_Oct_2010The volume of new listings rose in October to 11,911 however this increase was in line with seasonal trends and in scale was significantly down on the levels of 2009.

Seen over a longer time period the total new listings in each of the past 3 years for the first 10 months were 140,742 in 2008, 111,210 in 2009 and 116,933 in 2010. This provides an insight into the change in the scale of the property market over the past 3 years.

Inventory

Inventory_chart_Oct_2010The level of unsold houses on the market at the end of October rose to 52,043 from 51,035 in September. This represented the equivalent of 48.8 weeks, as assessed on a seasonally adjusted basis.

The continued subdued level of sales is holding inventory at such high levels despite this slower level of new listings, thereby adding to pressure on the market.

Regional Summary – Asking price expectations

Regional_asking_price_map_Oct_2010The national asking price expectation showed a 3.8% increase as compared to the recent 3 month average.

The majority of the 19 regions showed overall increases with 8 showing increases of more than 5% as compared to recent 3 month average.

Particularly large growth in asking price expectation was seen in Wellington where the truncated mean asking price rose 5% to a new peak of $455,422 surpassing the prior peak in Nov 2007.

Just 4 regions showed a fall as compared to the recent average with both Gisborne and Otago posting falls of 5% or more.

Regional Summary – Listings

New_listings_regional_map_Oct_2010The regional perspective with regard to new listings in October shows some variations with still the majority of regions showing a year on year decline indicating the potential for these markets to be deficient in new listings and therefore potentially leading to a seller’s market.

Notable regions showing significant declines in new listings are Waikato, Coromandel and Bay of Plenty – however all 3 of these regions though are seeing very high levels of unsold houses.

The main metro centres of Auckland and Wellington show falls of 12% in Auckland and just 2% in Wellington. The impact of the Canterbury earthquake continues to impact the property market there with new listings down 26% an identical level to last month in some ways reflecting the fact that whilst significantly impacted, the situation has not worsened with 1,312 new listings in the region over the past month.

Regional Summary – Inventory

Regional_inventory_map_Oct_2010It is very clear from the regional map of inventory levels that the property market continues to favour buyers when viewed purely from the perspective of the rate of sale as compared to the level of unsold houses on the market.

Some of these levels across the country are approaching or has reached new highs. In the month of October 4 regions posted new highs: Coromandel at 325 weeks, Northland at 181 weeks, Marlborough with 87 weeks and Waikato with 67 weeks.

Set against those significant highs are the only 2 regions which are showing levels below long term average – the West Coast of the South Island and Gisborne.

The main centres of Auckland and Wellington has levels slightly above average with Wellington showing this month a significant rise to 26 weeks. The Canterbury region has risen significantly this month primarily as a function of the very low sales reporting in September as a function of the disruptive impact of the earthquake at the start of the month.

Lifestyle Property

Lifestyle_listings_chart_)ct_2010The level of new lifestyle listings grew again in October following strong growth in August and September. On a seasonally adjusted basis the total of 1,110 listings represented a 3% growth, as compared to October 2009 actual listings are down 4.3%.

The truncated mean asking price for the new listings in October was up 11% from September to $584,912. This also represents an 8.3% increase in asking price compared to the recent 3 month moving average.

Apartments

Apartment_listings_chart_Oct_2010A total of 509 apartments were listed in October. The last 3 months has seen almost identical levels which reflects in a 7.5% seasonally adjusted decline and a 21.8% year on year decline. The truncated mean asking price fell to $356,306 in October from $362,427 in September. This level is down 5.4% as compared to October 2009. It is also the lowest price since the peak of the market at $460,734 way back in December 2007.

In the Auckland market total listings amounted to 310 down 27.1% as compared to a year ago and down 23.5% on a seasonally adjusted basis. Asking price expectation also fell from $321,845 in September to $317,283 in October, this represented a 10.6% fall from October 2009 and a down 0.9% as compared to the recent 3 month moving average.

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:

Property Price Index oct 2010

Index comparison 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 1,130 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 11,911 new listings in the month of October a total of 153 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 1.5m 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 118,000 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 1,130 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.

The full NZ Property Report for October 2010 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 November 2010 will be published on this website on Wednesday 1st December 2010 at 10am.

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Global property price analysis places NZ at the median spot on the podium

Posted on: October 29th, 2010 | Filed in Buying / Selling a home, Featured, International, Money Matters

Digital GlobeWe seem to be a nation that loves to benchmark ourselves to the global market and so it was naturally of interest to see the latest analysis by The Economist of the trends in global house prices.

The analysis is very timely as there has been some very interesting articles recently on both the NZ and Australian property market and the speculation as to the emergence (in the case of Australia) of a property bubble and in the case of NZ the continuance of a bubble.

The data utilised in the Economist article provides insight across 22 countries, across all continents and highlights recent price trends as well as long term trends and an insight into their evaluation of whether property prices are overvalued or undervalued and by how much. Certainly the picture of NZ is not certain as to future trends, but measured against other developed western economies our position is not out of line.

Recent price movement

The past year based on Q3 data for 2010 vs Q3 data for 2009 shows that from the chart below a large number of countries have seen property price appreciation. NZ has seen a 3.4% appreciation (QV data). The comparable REINZ stratified price data shows just a 0.47% appreciation based on actual sales price.

Economist global house price analysis Oct 2010 - Q3 py

The comparable position of Singapore, Hong Kong and Australia is significantly different with appreciation over the past year of over 15%. At the the other end of the spectrum the woes of the Irish property market continue to be felt with a 17% year on year decline.

Long term property appreciation

Taking the period of 1997 to 2010 shows in the chart below a consistent global appreciation with the majority of countries seeing around a doubling of value. Clearly the performance of the past 2 years will have depressed some of these performance numbers. NZ sits again firmly at the median point with a period appreciation of 108%. Again using the REINZ stratified house price analysis this appreciation was 109.6%.

Economist global house price analysis Oct 2010 - 97 to 2010 appreciation

Relative pricing

The most interesting analysis is undoubtedly the evaluation as to how over priced (or under priced) each countries properties are. New Zealand is judged to have property prices over priced by 20% as shown in the chart below.

Economist global house price analysis Oct 2010 - over under priced

This places NZ bang on the median spot on the podium with Australia taking its usual gold medal with property prices accessed as 63.2% over priced. It is interesting also to see our often comparatively benchmarked country of Ireland being judged as 13.2% overpriced – that after seeing a year on year negative appreciation of 17%. Just shows the extent to which that country’s property market had bubbled up in the past decade.

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NZ Property Market Pulse – October 2010

Posted on: October 21st, 2010 | Filed in Featured, Property Pulse - Regional Market Report

Property Pulse Realestate.co.nzThe Property Market Pulse report provides a set of factsheets for each of the 19 regions of the country consolidating the latest data from key sources in the real restate market. From the Real Estate Institute (REINZ) comes the latest sales numbers for September as well as the median sales price for key regions and the stratified sales price for key centers. From the Realestate.co.nz comprehensive database of listings comes the key measure of inventory of unsold properties on the market.

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.

NZ property sales - october 2010

Commentary:

Sales in September totaled 4,323. On a seasonally adjusted basis as presented in the chart above the sales were up just 0.6% on August. As compared to September 2009 this month’s sales represent a fall of 33%. The level of sales in the calendar year to date reflect closely the sales levels of 2008 rather than 2009. In the first 9 months of 2008 sales totaled 43,131; in 2009 they totaled 52,394 and in this current year the total is 42,630.

As is highlighted in the regional reports the impact of the Canterbury earthquake significantly impacted not just that region but the national numbers. The Canterbury sales impact probably amounted to around a 5% decline on a national basis as the region itself suffered a close to 40% decline.

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.

NZ Stratified house price - Sep 2010

Commentary:

The stratified price fell in September at $359,555 reflects a marginal change on August when the price level was $360,675. The level of sales price using this accurate stratified method has been without any great volatility for the majority of this year after recovering from the market lows of 2009. At this current level it represents a 5.6% fall from the peak of 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.

NZ Inventory - Sep 2010

Commentary:

The level of inventory of properties on the market measured in equivalent weeks of sale picked up slightly in September. It now stands at 47 weeks as compared to 46 weeks in August and compares to 32 weeks in September 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

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21 years and the internet comes of age

Posted on: October 18th, 2010 | Filed in Featured, social media, Technology

Computer mind explosion1989 – just 21 years ago. How different things were then. I was not living in NZ at the time so I was not here to witness the birth of the internet which is being so beautifully documented this month by the Wellington digital agency Heyday.

They have created an online visual calendar of the past 21 years of the internet’s birth, adolescence and maturity with a single day spanning a year. They are calling it “Down to the Wire“. Started on Monday 11th October and due to conclude on Monday the 1st November. The project is a comprehensive visual history of the internet. I commend them for their execution which has become addictive daily viewing.

1989_ The Story of New Zealand_s InternetAnother compelling piece of viewing has been the superb BBC documentary series “Virtual Revolution” which has been aired on Sky’s Living Channel for the past 4 Sunday nights. This is a series of unprecedented richness and insight into the impact the web has had on our lives over the past two decades. I was somewhat surprised to see it air on Sky as opposed to TVNZ – a sad reflection of the output of formula-driven, mass-market, mind-numbingly repetitive crime dramas that seem to proliferate the TV screen these days. This is in the classic form – a great documentary.

The series is energetically presented by Aleks Krotoski who has had the opportunity to interview some of the great luminaries of the technical world – Bill Gates, Mark Zuckerberg, Jeff Bezos, Al Gore (the man who claims to have invented the internet – as opposed to the person who did invent the web – Tim Berners Lee, Steve Wozniak, Eric Schmit as well as a host of other key people – the only conspicuously missing individuals would be Larry Page & Sergey Brin and of course Steve Jobs.

If you have missed watching the series I recommend you at the very least watch some of the online videos on the website and hope some time soon another channel broadcasts it or see if you can download it on iTunes. It is incredibly good, not so much as a chronological history of 20 years of the web but more as a forward looking discussion of the impact that this digital revolution has had and will continue to have on our daily lives.

I reflect on the past 20 years and consider myself fortunate to have been a witness to this period of history and further to have had the opportunity to have participated in some of these technological advancements. I have to confess to being defined by sociologists as a late baby boomer (although someone very kindly called me the oldest Gen Y’er), and as such am judged to be a digital immigrant, despite this tagging I am passionate about what the future holds through yet further technological advancements; the scope of which we may not yet have even conceived.

Indulge me if you will, to allow me to share some of my personal highlights of the early years of the web!

  • I first came across the principle of the web in 1989 when I was in France on business and discovered Minitel – a private web which allowed Parisians the ability to order stuff through a modem connected terminal in home.
  • I first used email in 1994 with communication between London and LA during my time working for a movie company. I felt trepidation in sending an email direct to a studio exec, somehow I judged in those days that a fax message was in someways less intrusive than a message flashing up on a PC screen.
  • I first discovered the web through a hideous website for Village Cinemas in 1995 through a Netscape browser – I recall the experience of blue and red font on a black screen as being really straining on the eyes!
  • I logged onto the web for the first time from my first home computer in 1996 – I recall unpacking that Xtra box allowing me to connect up to my then new PC Direct PC to the web and establish my own personal email address.
  • In 1999 I managed the design and build (or to be correct had built for me by the amazing guys at Webmasters) my first website – www.mode.co.nz (sorry no longer there!) – it was a site to compliment the specialised service of new home building of masonary constructed houses that I was involved with at the time, as part of Fletcher Building.
  • In 2000 I undertook a study tour of the US with a team from Fletcher Building to investigate e-Business (this was the term of the day then). We visited some great companies (Cisco / GE / GM) and some great dotcom hopefuls (Ariba / Buildnet / Webvan). The latter company – Webvan was my favourite – delivering home grocery shopping via the web. It was probably the most expensive dotcom crash ever taking over US$1,000,0000,000 of investors money with it as it crashed, a very small piece of which was my own money!
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September 2010 Property market video – Realestate.co.nz

Posted on: October 15th, 2010 | Filed in Buying / Selling a home, Featured, Market News, REINZ Monthly data

Video image header for blogThe latest statistics from the Real Estate Institute for September, providing insight into the residential property market are presented in this video.

The key charts to accompany the video are provided below:

The sales analysis of the 3 key metro areas highlights the impact of the Canterbury earthquake on sales in the region. The flat property sales market in Wellington is contrasted with a rise in sales in Auckland of 12%. The sales figures are seasonally adjusted to allow comparable month by month comparisons.

Key_regions_sales_Sep_2010

The Stratified price for the total of NZ shows the extent to which prices have continued to slide over the past year since November last year when they had recovered some of the early falls after the peak in mid 2007. The current stratified price across the country is $359,555.

NZ_Strat_price_Sep_2010

The Auckland property prices have risen sharply in September to $487,800 to edge closer to that long term peak of July 2007, currently that differential is 4.4%.

Auckland_Strat_price_Sep_2010

The Wellington property prices continue to see some weakness with the stratified price down in the month to $403,595 which is 4.3% below the peak of the market just under a year ago.

Wellington_Strat_price_Sep_2010

The Christchurch stratified property price continued to show weakness. It is likely that the impact of the recent earthquake and the resultant fall in sales could impact reported prices and the state of the market. For the month of September the stratified price was $330,750. This level represents a level 6.7% below the peak of the property market in the city back in October 2007.

Christchurch_strat_price_Sep_2010

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Canterbury market continues to feel the after effects of earthquake

Posted on: October 14th, 2010 | Filed in Featured, Regional News, REINZ Monthly data, Website searching

REINZ monthly article headerThe latest sales results released today by the Real Estate Institute bear witness to the fact that the real estate market across the Canterbury region is struggling. A total of 359 properties were sold in September down from the 884 sold in the same month last year and also down from the 647 in September 2008 – up until August, the 2010 year was tracking pretty close to the same levels as 2008 as seen from the chart below.

Canterbury sales data for Sep 2010

The results for the Canterbury region are not unexpected given the catastrophic impact that the earthquake had on the built environment, not just in terms of actual structural damage, but more importantly in verification of structural integrity. The early signs of the impact of the earthquake were seen in terms of website visitors as seen in the days after the impact. That situation was showing signs of improving. However as can be seen from the chart below now that four weeks have passed the overall level of visitor traffic is down around 23% from where it would have been expected to be at this time of the year.

Canterbury region website visitor stats 2009 and 2010

The other early sign of the impact of the earthquake on the region was reported within the monthly NZ Property Report which was published on the 1st October and covered the month of September in terms of new listings. In September a total 1,211 new properties were listed in the Canterbury region which was down 19% on a seasonally adjusted basis from August. This compared to a total for all other regions of the country excluding Canterbury showing a small 1% increase from August on a seasonally adjusted basis.

Half way through October the picture is looking very similar with new listings still down, this is best shown from the chart below which tracks the % representation of the Canterbury region listings each month. The October data is for the first 14 days of the month so far.

Canterbury listings to oct 2010

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NZ Property Report – September 2010

Posted on: October 1st, 2010 | Filed in Featured, NZ Property Report

The New Zeland monthly Property Report from Realestate.co.nzThe September 2010 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 September. 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.

The September 2010 report tracks a key month as the market heads into spring. Whilst the level of new listings is up, the extent of the rise does not reflect a buoyant enthusiasm by sellers. Equally whilst the volumes may not be massive the expectation of asking price is holding firm, up slightly on the prior month and short term average. The key determinant of the market though remains the levels of unsold houses which at 11 months is high.

Realestate_DownloadNowA full print version of the NZ Property Report – September 2010 is published below and is available for download (1.1MB) and distribution.

Summary of the market – September 2010

Cover page Oct reportThe much anticipated spring surge in new listings appears to have failed to eventuate with the number rising by just 1% on a seasonally adjusted basis from August. The September total of 10,559 new listings is down by 17% as compared to Sep 2009 (12,674) and down 12% as compared to Sep 2008 (11,966).

The Canterbury earthquake did impact the new listings for September. However it was not as significantly as might have been anticipated. The total of 1,211 new listings added in the month across the region was down 26% on the August total of 1,354; but making adjustments for seasonality and evaluating the rest of the country performance on new listings it would appear that the impact is of the order of 20% less listings across the Canterbury region than would have been expected; this would amounting to around 290 listings coming onto the market.

The continued pressure in the market remains the high level of inventory of unsold houses; this rose again in September to 47.5 weeks despite the significant lower absolute level of new listings. Inventory levels as measured in terms of equivalent weeks of sales are up 48% year-on-year and a long way adrift from the long term average of 39 weeks.

The asking price expectation across the country crept up slightly allowing for the seasonal rise which is evident at this time of year as properties are listed to meet the seasonal activity. This 1% rise on a seasonally adjusted basis would seem to signal a confidence amongst sellers, that buyers who have for so long been sitting on the sidelines will become more active.

Asking Price

Asking_price_chart_Sep_2010The asking price expectation of new listings increased again in September up to $411,745 from $403,423 in August. This represents a 2% fall as compared to September last year. Against recent 3 month period the price represented a 2% increase.

The current asking price still lags 4% behind the peak of the market – some 35 months ago now in October 2007.

New Listings

New_listings_chart_Sep_2010The volume of new listings rose between August and September as is expected at this time of year. However the levels failed to spark a recovery to levels seen in prior years at this time.

The trend reflects what has been a subdued year in listings with just 105,022 in the 9 months of the year. This is not significantly above the 2009 total for the same period of 97,660. By comparison over the first 9 months of 2008 126,275 new listings came onto the market.

Inventory

Inventory_chart_Sep_2010The level of unsold houses on the market at the end of September totaled 51,035 up 2% from August. This represented the equivalent of 47.5 weeks, as assessed on a seasonally adjusted basis.

The continued subdued level of sales is holding inventory at such high levels despite this slower level of new listings, thereby adding to pressure on the market.

Regional Summary – Asking price expectations

Asking_price_map_Sep_2010The national asking price expectation showed a 1.8% increase as compared to the recent 3 month average. However underlying this national picture is a wide variation of price movements.

There were more regions showing increases this month (13) than falls (6). The largest rise was in Otago which at $293,362 recorded an all time high in asking price surpassing the prior peak in October 2007. Other large rises were seen in Central North Island, Manawatu and Gisborne although these were far from peak prices.

On the declining side there were some large falls seen in the Coromandel, Hawkes Bay and largest of all at 14% decline in the Queenstown Lakes region. This latter region does see significant volatility with a peak in July 2007 of $668,973 and a low of $479,699 in February 2009. The current level of $536,592 is therefore more reflective of a midpoint.

Regional Summary – Listings

New_listings_map_Sep_2010The predominant colour of the regional map for September would indicate that the future prospects for the property market could lead to a seller’s market. The level of new listings is significantly below last year in all but one region – Southland.

This significant decline in new listings, with fully half of all regions showing greater than 20% year-on-year decline is however being balanced off with lower year-on-year sales and this is where the telling indicator of inventory levels shows a true picture of the market.

Allowing for the specific issues experienced in Canterbury the listings in the two other main metro areas saw less extreme falls in new listings coming onto the market.

Regional Summary – Inventory

Inventory_map_Sep_2010With a national level of 47.5 weeks the regional perspective of inventory of unsold homes remains well above long term average with just 2 regions (Gisborne and West Coast) dipping below long term average.

At the extreme, the Coromandel region would have to take the award. The current stock of property on the market totals 2,002 listings. Set against this stock is a sales volume in August of 18, following a July total of 19 property sales. These extraordinary sales levels mean that the current inventory represents 289 weeks of sales – or over five and a half years.

The Nelson region which has been seeing some shift to a seller’s market in prior months has fallen back as inventory has grown to 32 weeks up from the long term average of 28 weeks.

The main metro regions of Auckland and Wellington whilst not in extreme levels of inventory both show a reasonable level of inventory above the long term average.

Lifestyle Property

Lifestyle_chart_Sep_2010Lifestyle properties certainly picked up in September with 980 new listings. This was up from 840 in August, although as compared to last year the seasonal increase is not as significant. On a rolling 12 month basis lifestyle property listings are up 7.4% with 12,322 listed in the past 12 months.

The asking price expectation of these new listings was $527,170 which was on all comparative metrics was significantly lower. As against the recent 3 month period it was down 5.1%, against September 2009 down 12% and down 5% compared to August 2010.

Apartments

Apartment_chart_Sep_2010There was no appreciable seasonal lift in apartments coming onto the market in September. A total of 506 new apartment listings were added in the month. This was down 2% from the prior month and down 16% on the same month a year ago. The relative perspective for the Auckland market was 345 new listings, down just 1% year-on-year.

The asking price expectation was fairly firm with a truncated mean of $362,427 which is 0.4% up on the recent 3 month period, but down 13.4% on the same month last year. Auckland apartments equally showed recent stability off just 0.5% as against recent 3 months and down 12.6% as against September 2009.

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:

Index comparisonRealestate.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 1,130 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 10,559 new listings in the month of July, a total of 177 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 1.5m 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 118,000 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 1,130 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.

The full NZ Property Report for September 2010 can be downloaded here (1.1MB 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 October 2010 will be published on this website on Monday 1st November 2010 at 10am.

1

Putting your house on the market this spring? – 5 key tips

Posted on: September 27th, 2010 | Filed in Agent Tips, Buying / Selling a home, Featured

For sale signOver the next 3 months we are likely to see over 35,000 new property listings hit the market. Over the same period the likely number of sales will be around 15,000. That would assume that there is roughly a 50/50 chance of selling your house this spring, that would be right if it were not for the fact that today there is over 56,000 properties on the market. Now you can see the challenge – how to ensure that your house gets bought and becomes one of those sales stats and allows you to move on – as opposed to being part of the high inventory of unsold homes.

Success in real estate in today’s world relied far more on the web. Research from just a couple of months ago reaffirmed this fact.

We decided that we should provide some useful advice around helping sellers get the most out of online marketing and took the opportunity to quiz a leading global expert. Simon Baker was CEO of Realestate.com.au for most of the last 10 years and in that time built it into the leading Australian real estate website. In this video interview I ask him to share his thoughts  as to the best way to market your home.

Simon sums up the tasks in 5 easy tips:

  1. Check out your prospective agent online – do they understand online marketing? – how do they present themselves and their clients listings online? – how effective and efficient are they at responding to enquiries online?
  2. Make sure your listings are featured on a wide range of websites – every website should be available to all agents
  3. Make sure the online presentation is high quality with comprehensive information
  4. Standout from the crowd – take advantage to give yourself and your property an advantage – use premium listing adverts, they are incredibly cost effective
  5. Keep a close with your agent to web performance – viewing, enquiries, responses

Good luck with selling your home this spring – but don’t leave it to luck – give yourself the upper hand!

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Financial pressures still evident as mortgagee listings rise

Posted on: September 25th, 2010 | Filed in Featured, Money Matters

Financial pressureThe latest data of mortgagee sales released last week by Terralink International showed a significant slow down after what has been almost 30 months of unbroken increases month-on-month.

In June a total of 202 transactions were registered as being made by the mortgagor seeking to recover the loan from the mortgagee who had become delinquent on the repayments. (There is no specific details as to the make up of these 202 transactions, ie. how many were of investment properties / developments as opposed to family homes). This total was down from the 289 reported in June 2009 and 24% down on a seasonally adjusted basis from the prior month. The monthly sales chart is shown below:

Mortgagee sales to June 2010

This clear sign of decline may however be a brief rest-bite. The tracking of mortgagee listings which are featured on realestate.co.nz have for a considerable period of time been in decline, however the trend over the past 4 months has shown a U-turn with a steady increase in the number of properties coming onto the market being marketed as mortgagee sales. The total had fallen to just 250 in late May and has risen slowly over the past months to now total 321 as at today.

The chart below tracks the inventory of properties being marketed as mortgagee sales for the past 3 years. It specifically highlights the peak of mortgagee property listings in mid 2008 and subsequent decline and then in the exploded view the rise of recent months.

Mortgagee listings Sep 2010

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Real estate marketing – practical online advice

Posted on: September 20th, 2010 | Filed in Agent Tips, Featured, Online marketing, social media, Website searching

iStock_000000504669XSmallThe recent “Future of Real Estate” conference held in Auckland provided us with the opportunity of sitting down with the keynote speakers and interviewing them to provide some global perspective to the opportunity emerging in online marketing.

Blogging

Joel Burslem is a highly regarded consultant with a background in online real estate marketing which has included stints at Inman News, Prudential as well as 1000 Watt Consulting where he currently works. In this interview I seek to better understand Joel’s perspective, advice and insight into blogging from the standpoint of a real estate agent.

Search Marketing

No successful business these days can ignore the importance of search marketing and search engine optimisation. For real estate this is ever more important as the future of lead generation for agents will likely come from online referrals and evaluations. To achieve standout requires a deep appreciation and understanding of search. For the conference we invited Charles Coxhead to speak on this key topic. Charles has an extensive experience in this area and in this interview I speak to Charles and get him to share some of the critical issues and advice around this subject.

Online Marketing

With such an excellent line up of speakers, we grabbed the opportunity to have a panel discussion with Joel Burslem, Charles Coxhead and Simon Baker. This free flowing discussion starts off looking at the dynamic shift in real estate advertising from print to online as witnessed around the world. It then goes on to talk about the priorities for real estate companies, offices and agents in their online presence and marketing, covering the tools of Facebook and Google Adwords, amongst other things.

We split the session into 2 videos covering the 20 minute discussion:

Part 2

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