The Unconditional Blog

The impartial voice of the industry

 

Archive for the ‘Featured’ Category

4

NZ Property price recovery – are we there yet?

Posted on: December 15th, 2009 | Filed in Buying / Selling a home, Featured, REINZ Monthly data

iStock_000011075814SmallerThe reports of recent weeks and months would have us believing that the property crash of 2008/9 was well behind us and prices are now powering up to new highs.

Some of the data would support this – however as is well documented, you can always find data to support any argument. When it comes to house prices there is too much at stake to allow headlines to drive such important decision making activity as house buying.

In NZ as has been discussed and presented on this blog in the past there are a number of house price statistics which derive their data from a variety of sources – some more timely than others and some more robust than others. What there is a need for is a trusted and definitive measure of house price – in the USA the Standard & Poor’s Case Shiller House Price Index is the trusted gold standard.

The NZ equivalent is the Stratified House Price Index. This index was established in August utilising the data from the Real Estate Institute’s members (licensed real estate agents) of unconditional property sales. This raw data is then computed using the stratified model built by the Reserve Bank of NZ. The abstract of the methodology is summarised below:

Widely used measures of growth in mean or median housing prices will reflect changes in the composition of dwellings sold as well as changes in demand and supply conditions. Using a suburb-level dataset from the Real Estate Institute of New Zealand we use stratification techniques to adjust for compositional change and derive a timely and robust measure of housing prices for New Zealand. Results suggest this stratified measure produces estimates of housing price inflation that accord closely with the accurate but less timely figures obtained from the QV Quarterly House Price Index.

Simply put the use of medians and averages for house prices are always influenced by sales volume and sales composition (more or less high price / low price properties). The chart below provides a visual representation of the stratified median house price by month since Jan 2000 as compared to the straight median price for the same month. Both calculations are derived from identical data in each month.

REINZ Stratified house price vs median price 2005 to 2009

The divergence of the two lines from 2002, which showed the greatest gap in 2007 is likely to be the result of the composition of property sales over the period. The Stratified mean reflecting a higher price as a function of the compositional change in the NZ housing stock over the period – more higher priced properties.

Current data

The latest reported statistics of Stratified median price for November from the Real Estate Institute is broken down by key cities. The data is presented in the following charts which portray the detail of the past 5 years and highlight the market peak of prices and the market decline together with recent resurgence – they individually and collectively seek to answer the question: “are we there yet in property price recovery?”

National house price

Stratified house price - November 2009

The current price of $369,825 shows a recovery from the low point of January this year when the price had fallen to $337,400. That initial fall of 11.4% from the market peak of November 2007 when the market reached $380,900. The current price is still 2.9% below the peak of the market – No, we have as yet not recovered!

Auckland house price

Stratified house price - Auckland November 2009

The current price of $487,650 shows a recovery from the low point of exactly 12 months ago when the price had fallen to $337,400. That initial fall of 14.6% from the market peak of July 2007 when the market reached $510,197. The current price is still 4.4% below the peak of the market – No, we have as yet not recovered!

Wellington house price

Stratified house price - Wellington November 2009

The current price of $414,140 shows a recovery from the low point of September last year when the price had fallen to $372,075. That initial fall of 12.2% from the market peak of September 2007 when the market reached $423,955. The current price is actually just below the peak of 2 years ago, however the figure for October ($424,615) set a new peak – Yes, we have recovered!

Christchurch house price

Stratified house price - Christchurch November 2009

The current price of $345,925 shows a recovery from the low point of January this year when the price had fallen to $309,400. That initial fall of 14.6% from the market peak of October 2007 when the market reached $362,475. The current price is still 4.6% below the peak of the market – No, we have as yet not recovered!

Other North Island house price

Stratified house price - other north island NZ November 2009

The current price of $300,675 shows a recovery from the low point of January this year when the price had fallen to $283,600. That initial fall of 12.0% from the market peak of November 2007 when the market reached $322,305. The current price is still 6.7% below the peak of the market – No, we have as yet not recovered!

Other South Island house price

Stratified house price - other south island NZ November 2009

The current price of $276,100 shows a recovery from the low point of January this year when the price had fallen to $254,010. That initial fall of 13.1% from the market peak of February 2008 when the market reached $292,425. The current price is still 5.6% below the peak of the market – No, we have as yet not recovered!

16

Do you really need to subscribe to another property website?

Posted on: November 27th, 2009 | Filed in Agent Tips, Buying / Selling a home, Featured, Online marketing

istock_000007459744xsmallThis opinion piece is written primarily to address a question that I seem to be hearing more and more from within the real estate industry.

It also has relevance to property owners looking to sell your property. That is because I believe many agents when presenting a marketing campaign will boast – “we will feature your property on 5 websites” – with the next agent boasting “well we will place it on 9 websites!”

The reality is the number of websites is completely irrelevant – you could be on a million websites and still be missing the most important website – that is the point – you have to be on the right site – not every site.

Additionally the idea that your house in particular or NZ property in general should be featured on a US or UK sites is a misnomer – people from overseas do not look for NZ property on a UK site or an American site – they are smarter than that and seek out a NZ site.

Lastly the notion of an “International Property” website is at best misleading, and at worst a waste of money – except if you consider Google to be “The International Property Website”.

Given this preamble here is my address to the real estate profession on this topic.

As a real estate professional you clearly have a responsibility to promote your client’s listings to the optimal extent you can. Clearly promotion these days involves the web as the key medium used by property buyers. However, a critical question should be asked as to how many websites you should feature those listing on?

One of the greatest benefits of the web is that it has almost limitless capacity – estimated these days in the region of over 1 trillion web pages! – but clearly within this number are a significant proportion that are never going to be viewed – with a classic 80:20 rule applying – potentially in the case of the web and any specific category on the web more like the 95:5 rule, or even the 99.99:0.01 rule!

It is for this reason that I believe that you should think before offering your listings to be presented on just any website that happens to come along. In my judgement there are a number of questions that you should ask yourself or the prospective website.

  1. A website is meaningless unless it has visitors – you should ask the owner of any website to provide statistics such as Nielsen or Google Analytics. The key metric is unique browsers, this measures unique visitors and should allow you to judge and compare websites based on true audited audiences. Another critical issue is true traffic – not how many visitors they think they will have or how many they had last year – how many last week or last month.
  2. A website is a business – you should ask the owner of any website how they make money to pay to support the site. Are they relying on advertising or are they expecting you to pay. The question you should ask at this stage is “who needs who, the most” – is this website looking to use your listings to attract an audience to then make money from advertising?
  3. A website needs to have a track record and a planned future – you should ask the owner of any website how long they have operated and how they will support the website in the future. You do not want to find that the website closes down in 2 months or worse still is sold to someone else that you have no relationship with.
  4. A website should have a clear policy on copyright – you should get a copy of any websites terms and conditions. Make sure that you retain copyright such that this website cannot “sell” your listings / content onto anyone else for their profit; nor can they alter or change any of the content without your permission.

The expression of “there is no such thing as a free lunch” applies equally to the web as it does to any other form of business; and just as in any other area of business you have to be honest and say to yourself – do you want to waste your time uploading, managing, reviewing and checking your listings on 6 or 10 websites when in reality more than half of them generate very little traffic, no enquiries, but do take up your time?

The consumer in today’s online world is getting smarter – they more and more turn to Google to answer their everyday questions. Google does one thing exceptionally well – it makes sense out of the complexity that is the mass of information available to us these days. It is Google’s stated aim to organise and make accessible the world’s information. That being the case why not let Google help you judge as to which websites to put your content on.

Think about your prospective buyers for your home or one of your listings. Think about the kind of question they would type into Google – now do that yourself. Have a look at the results – these results on the first page should be your guide, these are the websites you should be on.

google-search

If you were to be really clinical then there were only a few websites you should place your listings on.

Naturally every listing should be on your own company website as well as major property portals. The reason for this is the fact that people want ease of searching and value comprehensive content that is what a major property portals can offer you.

So don’t be suckered into the first offer that comes by email saying that they have just the site you have always been looking for! – after all if you had been looking for such a site would you not have already found it and be on it!!

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