The Unconditional Blog

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Archive for the ‘Featured’ Category

1

Canterbury – how the earthquake is affecting the real estate industry

Posted on: September 13th, 2010 | Filed in Featured, Regional News

Balancing balls croppedA week has now passed since the devastating 7.1 scale quake rocked the Canterbury landscape and brought untold damage to the region and the picturesque city of Christchurch. The saving grace is the fact that there was no loss of life.

As life slowly and hopefully begins to return to some form of normality the question that has been asked is what impact will the earthquake have on the real estate market in the region? An article in the NZ Herald today states that around 150 house sales are in limbo as a direct result of the earthquake as they wait to be able to confirm finance and insurance.

Clearly an event on this scale and with the impact on the built environment will cause uncertainty in the minds of both buyers and sellers. That having been said with a population in the Canterbury region of 518,000 and 202,000 occupied dwellings (Census 2006) business and life will go on and that includes real estate. In July total sales in the region were 651 with 482 in Christchurch city itself. That amounts to close to 16 properties sold per day. Whilst the August sales result due to be published this week will be unaffected there will likely be some impact on September figures as well as subsequent months.

An early indication of the future state of the property market potentially can be gleaned from statistics of the Realestate.co.nz website providing as it does real-time data.

The level of visitor traffic to Canterbury properties took a significant and immediate hit immediately after the quake. This is only to be expected as more urgent matters were top-of-mind. The chart below tracks the daily visitor numbers viewing Canterbury properties for sale (this is the viewing of properties from both within the region as well as nationally and internationally).

CHC_web_traffic

As can be seen the prior 5 weeks saw an average of 3,000 to 4,000 visitors per day – the Saturday of the quake saw visitor numbers drop to below 2,000 with subsequent days climbing back up, closer to 3,000. Whilst still down by a third it is clear that the area is still attracting interest from buyers and sellers.

Another key metric measured by the website is the number of new listings and inventory of unsold properties on the market. The data in the last NZ Property Report and the Canterbury Monthly Property Pulse factsheet both highlighted that the property market in the region as viewed from August data showed a balanced market with an inventory level equivalent to 35 weeks of sales compared to the long term average of 31 weeks.

Since last Saturday, the 4th September, listings are still being added to the website, in Christchurch alone 188 new properties have been listed. Across the region the number of listings are down on a proportional basis, although not that significantly. Based on historical trends the total of new listings coming onto the market across the region look to be down by just 10%.

The media coverage of the events of the past 10 days have provided for us who do not live in the Garden City a sense of what is going on, however we cannot start to imagine what it must have been like to have been there on that fateful morning and for that reason we wish to pass on our good wishes to all the family and friends in this industry in the region. They like all real estate people are very much a part of the local community and I am sure they are doing their utmost to support their communities.

One of the great benefits of social media is hearing from people as they share their perspective and personal experiences. It was a couple of these blogs that caught me eye this weekend; reading the true story of what it has been like down there in the region. Have a read of the personal blog of Phil Hayes and the  Doctor in the House a blog by Steve Taylor.

3

Social media is the future of business

Posted on: September 10th, 2010 | Filed in Featured, social media

Social media croppedThis was the somewhat contentious moot of the debate held by the Auckland Chamber of Commerce this week. The moot was at times professionally, and at times somewhat irreverently debated by the two teams of which I confess I was one of the team members (speaking in favour of the moot).

The outcome at the end of the session was found in favour of the opponents of the moot; a result which, whilst disappointing from the standpoint of being on the loosing team was on quiet reflection not surprising.

After all it is not factually correct to say that Social media is the future of business, business is about far more than just social media. It is about products and services, it is about investment and development, it is about customers and marketing. Sure social media is a key component of the future of business – given that, as was stated in the Cluetrain Manifesto “markets are conversations” and there is no doubt that social media is all about conversations.

In providing a summation of the debate I thought that rather than detail the arguments for and against the moot, I would look at the panelists and examine their profiles and their social media interaction or at least the applicability of social media to their business or industry.

Starting with the negative team, suitably titled the “Privateers”. Jeremy Elwood was the team captain and suitably described himself as a biting social commentator and possessor of a devastating delivery style that will leave you in stitches! Jeremy is a comedian, a profession I would judge wholly reliant upon reviews and recommendations, in this context social media with its ability to share “live” experiences and thereby create viral waves of support would be the best medium of business development for any comedian. Clearly living by the sword (and dying by the sword) would be the consequences of the twitterati’s review of content and performance – however this would be no difference to the classic word of mouth of a decade or so ago.

Supporting Jeremy on the Privateers was Hannah Samuel. She describes herself as a Reputation Champion, providing as she does professional speaking and coaching on the subject of reputation. How perfectly topical for the age of social media – an age where your brand is ever more in the hands of your customers who define and communicate your brand message – so far different from the heyday of Madison Avenue driven brand messaging of the 1960’s to the 1980’s. Her business is modeled on her reputation and how people share the experiences she creates through her speaking engagements. Social media amplifies that messaging – she engages with the audience, they evaluate and share their experience and in so doing she grows her business.

The final member of the Privateers team was Mark Blackham. Mark is a specialist in government relations and communications, clearly an area where consultation and collaboration are key. It maybe the case that a lot of these activities wish to be managed within carefully orchestrated siloed and filtered channels (and I make no judgment of this) – however for the long term benefit of democracy the openness and interactivity that fundamentally underpins social media can only be seen as positive and constructive.

As for our team – the Socialites advocating for the moot. Our captain was Paul Brislen who is head of corporate communication at Vodafone. His passionate use and advocacy for social media has really established a deep and passionate relationship between Vodafone and its customers. There are many instances of this – one most actively seen on the night of the event was the deployment by their promotional twitter ambassador Vodafone Treats who simply offered a $150 voucher to retweeters of his offer – simple, effective, spontaneous and engaging. To see the impact just look at the twitter stream for the search term #aklchamber on the night.

Nobody could say our team lacked passion, especially with our second team member – Giapo, or more correctly Gianpaolo Graziolil. Giapo is the living embodiment of social media. His business is a classic SME – a single store in the centre of Auckland selling ice cream – however when judged on the social radar of Aucklanders, New Zealander’s and internationally he is a veritable rock star. He currently has over 4,000 followers on Twitter and over 11,000 on Facebook! – not bad for a sole operator. He recognises that what he does is not sell ice creams. He hosts an event. Every time people come into his shop, the act of coming to his shop is a memorable experience, and his passionate customers and even aspiring customers share their experiences through social media. Giapo has to be seen for being a living embodiment of the power of social media and the core of how social media is and will be a core part of the future of business.

My thanks to the Auckland Chamber of Commerce, to Murray Chapman for chairing the debate, to Rebecca Seymore-East who put the whole thing together and to Claire Del the marketing manager for having the courage and team to put this all together.

10

NZ Property Report – August 2010

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

blue pen and small houseThe August 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 August. 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 August 2010 report shows a market heavily impacted by low sales volumes. The lack of sales would seem to be impacting the number of new listings which are coming onto the market which are down by more than 10% on a seasonally adjusted basis. This tightening of supply is not sufficient to lessen the burden of inventory already on the market which barely moved in the month. Set against this is the fact that asking price expectation of sellers remains steady following a significant fall last month.

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

Summary of the market – August 2010

Report_cover_Aug_2010The month of August tends to show the first signs of the spring pick-up in activity in the property market, although the most significant impact is really felt from September onwards. The month of August this year showed little signs of such a pick-up, with new listings below 10,000 and down nearly 11% on a seasonally adjusted basis.

This decline in listings would ordinarily signal a tightening of the market at this time of year, were it not for the existing high levels of inventory already on the market and the flow-on impact of slow sales. The reported sales for July from REINZ were 4,411 which was the lowest July on record, down 27% from July 2009. These slow sales are resulting in inventory levels of unsold houses remaining above 46 weeks as compared to the long term average of 38 weeks, reinforcing the view that the market still favours buyers over sellers.

Behind the headline national figures lies a continuing sense of a two speed property market. The major metro areas are certainly stronger than provincial NZ.

  • Auckland has inventory levels closer to long term average (36 weeks vs. 33 weeks), new listing numbers were trending lower than the national average and the asking price has been edging up for the past couple of months.
  • Wellington equally is now at a level of inventory only slightly above long term average, new listings are down and asking price is steady.
  • Canterbury at 32 weeks of inventory of unsold houses is sitting right on the long term average, it has steady asking price and new listings volumes down 10% compared to prior year.

Asking Price

Asking price cht Aug 2010Asking price expectations picked up slightly in August having fallen significantly in July. The truncated mean asking price for August was $403,423, down just 0.6% on the prior 3 month average and up 1.6% on August last year. This would indicate stability in price expectation amongst sellers.

The current asking price still lags 6% behind the peak of the market – some 34 months ago now in October 2007.

New Listings

New listings cht August 2010The volume of new listings coming onto the market fell again in August with under 10,000 for the first time since June last year. As the chart shows this is the 5th consecutive month of decline.

Over the 12 months to August 2010 a total of 144,893 new listings came onto the market. This compared with 134,165 in the prior period – an increase of 8.0%, on the same comparison property sales have not kept pace rising only 2.8%.

Inventory

Inventory chart Aug 2010The level of unsold houses on the market at the end of July totaled 50,138 down 4.3% from July. This represented the equivalent of 46.1 weeks, as assessed on a seasonally adjusted basis.

The inventory level did not fall as markedly due to slower property sales.

Regional Summary – Asking Price Expectations

Asking price map Aug 2010Nationally the asking price expectation of the new listings in August showed very little change following the significant fall in July. Measured on a month-on-month basis or versus a 3 month average the variance is small. This would indicate that sellers sense that no further adjustment is required to ‘meet-the-market’ and thereby the expectation of buyers.

Across the country the trends are mixed with just 5 of the 19 regions showing rises in asking price expectations – all of which are below 5%. On the declining side there were some significant shifts with Central North Island down 21.5% and Wairarapa down 15.6%, both of these two regions are now sitting at a low point in asking price stretching back to Jan 2007.

Regional Summary – Listings

New listings map Aug 2010The steady decline in new listings seen for 5 straight months is beginning to tell in the market with early signs of what could be a looming shortage, if sales were to take off.

Around the country the predominant trend is fewer listings on a year-on-year basis; 10 of the 19 regions showed falls with a further 4 showing stable listings volumes.

In four of the regions (Northland, Waikato, Coromandel and Wairarapa) the level of new listings in August were the lowest months on record stretching back to January 2007, indicating the state of the market in these provincial areas.

Regional Summary – Inventory

Inventory map Aug 2010Despite the decline in new listings the inventory of unsold houses remains doggedly high. This is especially true of provincial areas more than metropolitan regions of the country.

Examining the 3 main centres shows that they are close too or actually in line with long term average levels of inventory thereby indicating that in these cities the market is well balanced.

Across the provincial areas of the country though the picture is very different as the swathe of green shows on the map indicating the higher levels of inventory as compared to long term averages.

The only provincial areas bucking this trend are Otago and Nelson. The latter particularly is conspicuous in now having an inventory below long term average and thereby indicating that the market is now edging more to a seller’s market; something not seen in this country for a couple of years.

Lifestyle Property

Lifetsyle_listungs_chart_Aug_2010Lifestyle property listings were subdued in August with 840 new properties coming onto the market, down 5.2% on August last year. Compared to the same period for the past 2 years lifestyle property listings could be seen as a fairly steady market.

In regard to asking price expectation the truncated mean for August was $556,440, this is up 3.8% on July and up 3.4% on the prior 3 months indicating strength in price expectation.

Apartments

Apartment_listings_chart_Aug_2010A total of 516 new apartment listings came onto the market in August. This represents a 7.7% decline month-on-month and a 13.3% year-on-year decline. Whilst not the lowest month, new listings in this sector continue to remain flat as they have done for the past 3 years.

The Auckland market saw 336 new apartments listed, down 3.7% month-on-month and 8.9% down year-on-year.

In terms of asking price expectation the truncated mean asking price in August was $358,030 which is identical to the prior month and down 2.6% compared to the prior 3 month period.

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_Aug_2010

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

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

Notes:

Truncated mean

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

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

Methodology

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

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

In analysing the details of the 11,106 new listings in the month of July, a total of 165 listings have been excluded due to anomalies. The categorisation of Lifestyle property is defined by the land area of the property. The criterion is a property having in excess of 0.3 hectares and being situated outside metropolitan areas.

Background to Realestate.co.nz

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

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

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

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

Prime Commercial is a specialist website presenting the most comprehensive selection of commercial property for purchase or lease on the market across NZ. At this time it features over 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 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 1,140 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.

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

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

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The smartest agents recognise the power of technology – how we are helping

fore-logo-homeLater this week Realestate.co.nz will host its first ever conference focused on the role that technology in all its forms is having on the real estate industry. Titled the “Future of Real Estate” the conference to be held on Friday 3rd September at Waipuna conference centre in Auckland and will feature both domestic and international speakers as well as workshop sessions focused to the key business tools of the web – Facebook, blogs and Twitter.

The conference is very much influenced by the experiences I have encountered in attending the Inman Connect conferences in the states each year. Coupled with the style and richness of the Inman conference the NZ conference echos a quotation which I first heard at least 3 years ago and still to this day rings so true:

“Traditional agents will not be replaced by technology.. they will be replaced by agents with technology”

The quote comes from an Australian real estate conference and every time I use it; it reinforces to me the critical requirement of real estate professionals to recognise that technology is not the threat, but rather it is the means to take a giant step forward and surpass all those in the industry who believe technology is the threat. Over these past years I have been keen to get together an event in which we can help those in this industry who want to move ahead and who are keen to meet like minded individuals and listen and collaborate with the best in the business. This conference is the realisation of this ambition.

The event features some great contributors:

From the US we have invited Joel Burslem. Joel is a respected expert within the real estate industry. He is a blogger, real estate marketer and consultant. He founded the Future of Real Estate Marketing blog whilst working at Inman  News and now is a key part of the consultancy firm of 1000 Consulting. Joel will be providing an overview of the trends in digital marketing around the world with detail around the role of social media in this industry.

From closer to home we have Nicholas O’Flaherty who is MD of Bullet PR, a respected specialist media consultancy company whose clients value the skills and innovation Nicholas’ company brings to the implementation of social media. Bullet recently hosted the enormously popular Social Media Junction conference with outline plans for a further event later in the year. Nicholas will be picking up on Joel’s presentation and bringing the local perspective as well as the practical examples of the best in the marketplace today in NZ using all forms of social media.

Addressing the ever present question in relation to the web – that of search we are very pleased to have Charles Coxhead joining the conference. Charles has a long and distinguished career specialising in search. As an online search and marketing consultant he has worked with clients such as Air New Zealand, Expedia as well as Realestate.co.nz. He will bring some focus to the ever evolving search landscape that nowadays transends beyond just Google into real time search as well as hyper local search and in so doing will apply the test as to the relevance for the real estate industry.

Our final keynote speaker is Simon Baker. Simon is well known and highly regarded within the real estate industry primarily in Australia where for 7 years he lead the stellar growth of realestate.com.au into the substantial ASX listed company with revenues exceeding A$160m. Since leaving the REA group, Simon has persued a strategy as an investor and consultant, his focus in online classified businesses with international scale and within that area he has investments in a number of Asian real estate portals. He brings to the conference a reflection on the criticality of the real estate portals and the heart of the business which is exposure to real estate listings through online marketing. He will also provide some interesting insight into the comparison of development between Australasia, Europe, US and Asia when it comes to real estate online.

The event promises to be a fast paced, rich content experience which in addition to the keynote presentations will feature workshop sessions on Twitter, Facebook, blogs and online etiquette. The day culminates with a panel discussion on the topic of the future of real estate and its implications for all involved in the industry.

The event is for the real estate industry and anyone involved in the industry at whatever level or in whatever capacity is welcome to register. There is a limited number of spaces still available so if you are interested please register before the event as registrations need to be made online prior to the event.

2

NZ Property Market Pulse – August 2010

Posted on: August 26th, 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 June 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_July_2010

Commentary:

Sales in July fell by 2.9% from June on a seasonally adjusted basis. A total of 4,411 property sales were recorded by licensed real estate agents in the month of July. Back in July 2009 the total sales was 6,014. On a moving annual basis sales are up 2.8% with 63,701 sales in the past 12 months as compares to 61,952 in the prior 12 months.

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_July_2010

Commentary:

The stratified price fell in July to $359,525 from $363,925 in June. The June price is up just 1.8% as compared to July 2009. As highlighted in the chart above the sale price across the country has remained fairly stable over the past 9 month with some small ups and downs. The current price is still 3.1% below the peak price in the market back in November 2007.

Stock of Property

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

NZ_Inventory_of_unsold_houses_July_2010

Commentary:

The level of inventory of properties on the market measured in equivalent weeks of sale picked up again in July. It now stands at 47 weeks as compared to 47 weeks in June and compares to 33 weeks in July 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

10

The future of journalism – gifted amateurs or serious professionals?

Posted on: August 25th, 2010 | Filed in Featured, Media commmentary

Newspapers and onlineThis was not the title of the lecture given yesterday by Gavin Ellis, the former Editor-in-chief of the NZ Herald, as part of the Winter lecture series hosted by the University of Auckland – a series titled “The end(s) of journalism”. Gavin’s lecture was titled “Paying the Piper“. I chose the title for this blog post to reflect I guess, what I saw as the challenge raised within the lecture and representative of the challenges facing the broad media industry in general, of how to deal with the changes wrought by the explosion of self-publishing facilitated by the medium of the social web and the blog.

The lecture provided an excellent and compelling insight into the background to the current state of the newspaper industry globally (more of this later) and then moved on to examine the challenges of how to separate the function of the newspaper – to inform; from the role of the newspaper – to make money. Gavin outlined the Trust models established under governing charters which set out to protect the democratic integrity of journalism as verifiers of the truth in news. Great examples exist – most notably The Guardian in the UK and The Irish Times.

However when it came to the often-debated issue as to the credibility of blogs vs serious professional journalists – the analogy Gavin used of feathers vs. lead shot whilst making the point, did not resonate with me. His argument was that serious professional journalists have a natural advantage in having significant inertia in political influence – and collectively a ton of lead (as the analogy of the collective weight of a group of serious professional journalists) can exert that influence through the media to hold politicians to account. However he then went on with his analogy to liken bloggers and their individual influence to that of a feather, and even when aggregated as a ton of feathers does not have the same attacking impact as a ton of lead. This analogy sadly seeks to generalise bloggers as lone individuals with tiny audiences. This is far from the truth.

There are many bloggers with far greater, more engaged and loyal audiences than many journalists and whole media vehicles. These are not uninformed amateurs,  rather they are more often than not serious journalists who are breaking the news – take Bernard Hickey of Interest.co.nz for example. He has the critical audience to be respected as a serious journalist and can unnerve the odd politician, and yet he is not a cog in a giant media empire. He is not alone here in NZ or overseas there are many other examples – the  Huffington Post being a most notable one.

The point with blogs is that they allow specialisation – empowering experts in tight niche areas to have a voice and engage an audience, yes there are many very amateurish ones, but the beauty of the web is that audiences find and share what they like and the cream always rises. So I would have to challenge the notion of the lecture that the only way to ensure the safety of our democracy (for that was the alarmist view) solely lies in the protection through Trust structures within media organisations where serious professional journalists can operate unsullied by the commercial reality of business. There is a place for this model, but it is important to allow the democratic medium of the web and its aggregation of specialist bloggers to add their capability to the future of news in a new dispersed and open manner which allows it to be pushed to those that wish to receive it.

Returning to the research background of the lecture. I was enlightened and impressed by the analysis of the self generated issues that the newspaper industry has collectively got itself into over the past decade presented in the lecture. Paying respect to Gavin Ellis for his extensive research, let me share a summary of his perspective.

The seeds for the demise of newspapers in the western world and especially the English speaking world were sewn in the 1950’s – a time of rapid rise in newspaper circulation. In the US circulation broke through 60 million by 1964 and in NZ it grew from 785,000 to 1,000,000 in the late 50’s / early 60’s. As circulation grew so did advertising revenue – the era of mass market advertising was in its heyday as Madison Avenue splurged on newspaper advertising. Between 1950 and 2000 advertising revenue in print in the US grew by 2251%.

This booming business of newspapers in the 70’s and 80’s saw the stock exchange listing of many newspapers given the fixed cost nature of the industry which was leading to very high profit margins. With every growing revenue and strong circulation their collective stock values rocketed in the 1980’s. This then sparked a round of acquisitions as media empires were built.

However with the start of the 1990’s newspapers began to loose circulation as alternative media appeared. the US circulation peaked in 1993 and fell below 60 million and has been falling since then. In NZ peak circulation at 1,050,000 fell to 727,000 by 2005. Interesting at the same time newspapers began to quote readership rather than circulation – hoping to bolster the data.

The 1990’s also exposed a fundamental flaw in the industry which Gavin Ellis describes as the “service gap” – as circulation fell, newspapers steadily increased advertising rates – endeavouring to sell a scarce resource, however this was always going to come back to bite the industry as it has done in the last 10 years. However to shore up this broken business model the industry consolidation which began in the 1990’s accelerated with the created safety of  powerful monopolies and duopolies as we have effectively had in NZ. This helped support the industry right up until the Great Recession.

The past 4 years has been the worst of times for newspapers globally. Saddled with enormous debt borne of the aggressive acquisitions of the past decades and hyper inflated stock valuations, matched to declining advertising markets, have destroyed balance sheets and lead to aggressive cost cutting. In the US many newspapers have folded and many more may well yet fold.

Now barely limping back from the effects of the recession, newspapers are challenged by the online world of instant access to all the news – no longer needing to wait for the daily print version when news is truly 24/7 and pushed to individual devices rather than being found. Gavin’s prediction for the future of newspapers (which I could see) would be the elimination of the daily printed newpaper, replaced by a online subscription model wrapped up with a weekend print edition. Personally I could buy (and would buy) this concept – as long as quality content is consistently provided – that quality content could come from serious professional journalists or alternatively the aggregation and curation of the collective wisdom of professional bloggers. Ideally a mix of the two.

Gavin Ellis is the former Editor in Chief of the NZ Herald and is currently completing his doctoral thesis in political studies at the University of Auckland. The notes on his lecture are published by the NZ Herald.
4

Property buyers continue to favour the web over print when searching

Posted on: August 24th, 2010 | Filed in Buying / Selling a home, Featured, Online marketing

Family viewing laptopThere is a fundamental disconnect in the real estate industry today between where the industry advertises and where the audience of buyers are researching.

The latest data from this Nielsen survey highlights this in stark relief. Currently around 90% of the dollars spent by the industry (somewhere over $2,000,000 per week) is spent on traditional print media – specialist magazines as well as national and local newspapers.

That spend though is not relevant to where buyers are researching the property market. The Nielsen survey asked respondents to select which of 15 different mediums (print, online, signs, magazines etc) they had used in the past week to assist in researching real estate. Respondents were able to tick as many forms of media as they liked.

The results this year are staggering as is the trend of the 4 years that the survey has been undertaken – this point is made as whilst some may judge that as the survey is undertaken online there may be a bias. However you judge the methodology, the trends are not to be ignored or dismissed.

National newspapers have now fallen to a level where just 1 in 4 of people surveyed had used them to research in the past week. Back in 2007 it was just half of all people surveyed, in 2008 it fell to 43% and last year it was down to less than 1 in 3. So in the space of just 3 years the proportion of people in the survey relying on national newspapers to research real estate has halved.

Newspapers source of content

Specialist real estate magazines have equally suffered a decline over the years. In 2007 they were judged by 6 out of 10 respondents as being a part of property researching in the past week. By 2008 they had fallen to 55%, 2009 saw a further fall to below half of all those surveyed and finally this year they have fallen again to just 45%.

decline of specialist magazines

Over the same period the web has been in the ascendancy. Even back in 2006 with the first survey, the web was judged by 7 out of 10 to be a valuable source of research in the past week. In 2010 that ascendancy and supremacy has grown. Heading the pack are specialist real estate websites of which Realestate.co.nz and Trade me property are the two dominant sites, this category is now judged by 8 out of 10 respondents as a valuable source of research in the past week. Closely behind are company websites (64%) and search engines (42%).

ascendancy of specialist websites

Not only are real estate websites chosen more often as a source of property research the amount of time that people are spending on them continues to grow. For specialist real estate websites the weekly total is now over 3 hours (197 minutes) up from 172 minutes last year. Company websites and search engines are both up and both exceed 2 hours per week. The print publications in the real estate arena on the other hand are falling – national newspapers now account for less than an hour per week and specialist real estate magazines just over an hour a week (down from 77 to 76 minutes).

The trends presented in this Nielsen survey truly reflect usage by property buyers. More and more these days real estate professionals rely heavily on lead generation and online marketing of their clients’ properties from the web – on specialist real estate websites as well as their own company websites.

With close to 90% of all NZ’ers now accessing the web and broadband penetration exceeding half of the population, not to mention the projected rise in mobile internet, the future for the real estate industry will ever more be online – the question is clearly going to be – for how much longer can the industry afford to keep pumping all that money into print media?

Note: The Nielsen Real Estate Market Report is based on a website-intercept survey on New Zealand real estate websites conducted during May and June 2010 with a sample size of 1,225 respondents and a margin of error of 2.86%.
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Sellers turn to trusted agents to facilitate sale – results of a new survey

Posted on: August 20th, 2010 | Filed in Buying / Selling a home, Featured, Online marketing

house for sale Jan 2010The emergence of the web seemed to transform the landscape for buying and selling everything, including real estate; and certainly the principles of the democratic web have had a dramatic and permanent effect on the real estate market.

Most noticeable among this has been the richer and more comprehensive information available on the web – thankfully long gone are the days that an agent posted a single photo and a brief description for the property – nowadays listings are often comprehensive summaries with 20+ photos, videos, neighbourhood profiles and every facet of information as well as a clear price indication; all valuable for prospective buyers.

However as with this change have come the challenge to the real estate industry of private sellers leveraging the reach and cost effective advertising of the web to seek to secure a transaction and thereby save the commission fees charged by agents. Certainly the stories abound of the perceived benefits of DIY real estate. Just last month Fair Go featured a piece on private sales and only in the past week a business writer from the NZ Herald highlighted great success.

Whilst there is no doubt that private sellers are actively promoting their properties seeking to find buyers the latest findings of the annual Nielsen Real Estate Market Report shows that private selling may well be loosing some of its lustre.

As part of the Nielsen survey which is undertaken through an online questionnaire respondents are asked about their intentions when it comes to selling a property. In this latest survey the respondents who said that they would definitely sell privately totaled just 11%, a further one third of people stated that they would probably list with a real estate agent, but would give a private sale a go first. The balance of 47% – close to half of all respondents stated that they would definitely list with a licensed real estate agent.

preference_for_selling

The 11% of those surveyed indicating that they would definitely sell privately can be compared to each of the past 3 years when the question has been asked in the survey. Each year the intention has declined from the starting point in 2007 at 17% a steady decline totaling 35% has been witnessed to the current level of 11%.

At the same time over the same time period the proportion of respondents who have stated that they intend to definitely list with a real estate agent has grown from 35% in 2007 to now represent close to half of all respondents at 47%. Over viewing the results of the survey for the past 4 years shows that back in 2007 the sellers in the market were evenly split 3 ways – one third clearly judging that an agent is the route to sell, a third made up of definitely sell privately combined with the “don’t knows” and a final third uncertain as to an agent or doing it themselves. Today 3 years later nearly half of the respondents are recognising that agents can be trusted in such uncertain times; with another third still unsure, but probably going to rely on an agent.

Clearly the pendulum has continued swinging back towards agents as the complexity, litigation exposure and the ever present challenges of today’s buyer’s market environment leave people questioning why they would want to take on the role of self employed agent as well as their current day job.

private_sell_vs_agent_2007_2010

It is interesting to note how coincidental it is that in an earlier analysis of the property listings market undertaken earlier this year 11.4% of all listings on the market were identified as private listings and similarly an often quoted statistic is is the estimate of total private sales (no corroborative data available) at c. 10%.

Note: The Nielsen Real Estate Market Report is based on a website-intercept survey on New Zealand real estate websites conducted during May and June 2010 with a sample size of 1,225 respondents and a margin of error of around 2.86%.
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Property investment loses its appeal – results of a new survey

Posted on: August 18th, 2010 | Filed in Buying / Selling a home, Featured, Property Investing

Investment property  Aug 2010Since the budget announcements in May as to the treatment of investment properties there has been extensive speculation as to the likely reaction of the investor segment of the property market.

The market both prior to May and subsequent to the announcement has shown virtually no movement (certainly no positive movement). The seasonally adjusted volumes for this year as represented in the chart (blue bars) track a very static level of around 4,500 per month well down on 2009 (green) and ominously close to 2008 (red).

REINZ sales Jul 2010

This sales data from the Real Estate Institute unfortunately provides no insight into the type of property purchased. However a recently released survey can now provide some valuable insight.

The annual Nielsen Real Estate Market Report 2010 now in its fifth year for which Realestate.co.nz is the primary sponsor has in the latest release highlighted a major flight of investors from the market comparing 2010 with prior years.

The survey, which is undertaken through an online intercept questionnaire, measures many aspects of the property buying and selling process. When it came to asking about buying intentions of the 1,225 survey respondents, it showed that their intention to buy an investment property had slumped by 40% in a year. Last year 1 in 4 of all those surveyed said that their intention was to buy an investment property. Just 12 months later when this survey was undertaken in May/June of this year that intention had slumped to just 1 in 7 – just 15%; the lowest level seen in the past 4 years of this annual survey.

Investors buying intention

Matched to this very clear intention of investment buyers was the fact that those who owned investment property were now far more likely to hold rather than sell – this is likely to be a clear factor in the slowing of the property market. Holders of investment property in the survey showed a 42% decline in intention to sell.

Investor intention to sell

Another aspect to the investor profile in the market is the likelihood that investors will target private sellers who they perceive as offering great deals in this “buyer’s market” – in the space of the last year there has been a 24% increase of intention by property investors to seek out private sellers as a source of property investment – 41% of investment buyers stated that they would prefer to buy privately.

Note: The Nielsen Real Estate Market Report is based on a website-intercept survey on New Zealand real estate websites conducted during May and June 2010 with a sample size of 1,225 respondents and a margin of error of 2.86%.
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Vineyards for sale – a perspective of the market of the past few years

Posted on: August 17th, 2010 | Filed in Businesses for Sale, Featured

iStock_000011873443SmallThe NZ wine industry is worth around $1 billion a year in exports, a staggering increase from just $168 million at the start of the decade. There are around 643 wineries across the country and this total has witnessed a significant increase over the decade from just 358. These statistics are part of a very detailed annual report produced by the NZ Winegrowers .

Whilst it is recognised that there is not a perfect correlation between vineyards and wineries, the data we collect from the website of Realestate.co.nz can provide an insight into this important industry from the perspective of when and how vineyards are marketed for sale. The website provides a detailed analysis of activity across the breadth of the real estate market going back to the beginning of 2007.

Within this expansive phase of the last decade there has been a steady stream of transactions as vineyards have been bought and sold. In the past three and a half years some 305 vineyards have been advertised for sale on the website of Realestate.co.nz under the Farms section and now on the specialist website of www.nzfarms.co.nz .

At this time there are 76 vineyards on the market. Not the highest level over the period as can been seen from the chart below but higher than inventory during 2007, when economic conditions were more favourable and business finance somewhat easier to hand.

Vineyards listed and on the market in NZ 2007 to 2010

Vineyards tend not to sell that quickly and that is why the average time on the website has been just under 9 months across all of these listings over this period.

In terms of where these vineyards are located the majority have come onto the market in the Marlborough region (44%) followed by Hawkes Bay (19%), Central Otago (17%) region. The chart below contrasts this regional listing focus to the reported 2009 data of regional location of wineries.

Vineyards_by_region

In terms of listed prices – ranking all of the listed vineyards from most expensive sees all of the Top 10 feature Marlborough vineyards ranging in price from $10m to $30m. Fully 70% of all the vineyards marketed over the past 3 and a half years have been priced at over $1m. Currently the most expensive vineyard on the web is this 71ha winery and vineyard operation in the Blenheim areas with just over 54ha of planted vines, together with a purpose built winery. The price $18m.

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