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Auckland property – facts on the state of the market

istock_000006996157xsmallRecent data published in the media seems to be pointing to a impending bubble in the Auckland market – described in the NZ Herald as “a bubble that will burst and cause a painful property recession”.

I confess that our own NZ Property report for November contained a component of this speculation stating as it did that

The price rise in Auckland (asking price expectation) of 4.1% (Nov ’09 vs. 3 month average) is a direct result of the tightness of the market with inventory levels remaining tight as the flow of new listings seems to be being met by a steady demand

As ever any analysis of a market in order to be able to establish trends requires access to the most comprehensive data. It is appropriate to gather this data and undertake some detailed analysis.

The chosen data I have analysed for the Auckland region is the REINZ sales figures and the new REINZ / Reserve Bank Stratified House price index. Both of these sets of data are geographically defined as being the compete Auckland Region comprising the current 7 local authorities. The sales data is sourced from all of the licensed real estate offices selling properties which are in this region.

To this data I have analysed the data of property listings which uses the same geographical boundaries as the REINZ data and is compiled from the listings of licensed real estate offices for properties listed in the region. The website is the most comprehensive source of property listings of real estate agents with over 94% of all offices loading listings to the website.

As a point of note the NZ Herald article made its assertion based on data from Barfoot & Thompson sales data as representative of the Auckland market. There is potentially some error in this assumption as B&T operate extensively in Auckland as well as Northland and down through the middle of the North Island – of the current 7,568 listings on their website 17% (1,322) are for properties outside of the Auckland region.

Taking sales data first. The fact is that sales in Auckland are back from the extreme lows of 2008. At that time average monthly sales were around 1,406, the most recent 6 months in Auckland have seen an average of 2,059 up 46%; however the average through 2007 (albeit clearly recognised as a heady peak of the market) was 2,537.

The chart below details sales over the last 3 years with the respective months of Aug / Sep / Oct / highlighted in red. The key thing to note is how the sales level appears to be relatively stable over the period since March 2009 at a consistent level similar to 2008 albeit 50% higher.

Auckland property sales 2007 to 2009 REINZ

Turning to pricing which is naturally the key concern to most people as most people only want to buy or sell one house.

The Real Estate Institute have with the assistance of the Reserve Bank produced a very credible Stratified House Price Index which stands up to the extreme scrutiny of economists and academics as it is not impacted by the externalities that affect average or median price as a function of the performance of house sales within differing price bands.

The data for this House Price Index goes back to 1992 and the Auckland data is presented in the chart below:

Auckland Property Price - Stratified House Price Index REINZ

The striking rise through the last decade is most evident from the graph as is the fall from the peak and the subsequent resurgence. However what is also very clear from the graph is the fact that using this credible house price index the market price in Auckland has not as yet returned to the peak level seen in July 2007 – the current price index is still 5.8% below the peak.

In terms of actual stratified median price from the same data the current (Oct 09) price in Auckland is $480,510 and the peak in July 2007 was $510,197. This does contradict the article which stated that Auckland prices had “recovered all the losses experienced over the past two years“.

It is useful to match side by side the sales across the Auckland region with the sale price as the chart below does. There is a recognised fact, in that prices tend to follow sales volume trends and the rise and subsequent decline in volumes and price through 2007 and into 2008 would attest to that, as would the volume rise and price rise in early 2009. The key issue now though is the trend of price rises extending whilst sales volumes have moderated – this could foretell a softening of prices in the coming months.

Auckland property sales and price

As a further support to the view that the Auckland market is stabilising and not about to create an inflated bubble is the additional data set of listings. The chart below tracks the number of new listings added in the market in the Auckland region matched to sales. What is interesting is how conspicuous is the rising level of new listings which is leaving a fair gap from the monthly sales – this would indicate that the market has a growing stock of houses for keen buyers.

A growing inventory of new listings takes pressure off prices and buyers feel less pressured to have to “grab a property” in the fear of missing out which was the symptom so conspicuously seen back in the peak of the bubble through 2006 & 2007.

Auckland property market new listings and sales 2009

Overall I believe that in analysing this comprehensive and robust set of data there is more than enough evidence to take the view that the Auckland market is fairly well balanced and therefore unlikely to suffer a “painful property recession” – however forecasting the property market is never an exact science and only time will tell, after all this data is all historical – telling us what happened, nothing for certain ever tells us what will happen!


Will the new law change the way homes are sold?

Posted on: November 29th, 2009 | Filed in Buying / Selling a home, Media commmentary, Other interesting reads:

istock_000004343314xsmallAn article in the Herald on Sunday makes the assertion that the changes to the Real Estate Agents Act 2008 will change the way properties are sold.

I would hold that the new law will not change the way that homes are sold.

The article states that :

A property lawyer is tipping more sellers could opt to sell privately to get around new rules making real estate agents disclose defects in the home to potential buyers.

What I interpret this statement as saying is “if you (the seller) want to hide known defect in your home, then don’t use an agent and sell privately so you don’t have to disclose defects”. I find this surprising coming from a lawyer, after all, the seller always bears a responsibility to provide factual information regarding a property when questioned. More importantly any half-smart buyer contemplating parting with over $350,000 for a median priced property is surely going to get expert reports on the condition of the property.

To think that in some way private sales of houses would be judged by the buyer to be a less risky purchase or to think they can approach it in a more relaxed manner is staggering.

The new Act certainly places a greater responsibility on the agent. This is good. The principle of the Act is to bring greater transparency and greater safeguards for buyer and sellers. The real estate industry has embraced the new Act and sees these added responsibilities as further evidence of the professional service they wish to provide buyers and sellers.

To provide some clarity to this issue the Act details the professional standards of conduct expected and required of agents in section 6 of the Code of Professional Conduct and Client Care.

6. Standards of professional conduct

6.1 An agent must comply with the fiduciary obligations to his or her client arising as an agent.

6.2 A licensee must act in good faith and deal fairly with all parties engaged in a transaction.

6.3 A licensee must not engage in any conduct likely to bring the industry into disrepute.

6.4 A licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or fairness be provided to a customer or client.

6.5 A licensee is not required to discover hidden or underlying defects in land but must disclose known defects to a customer. Further, where it appears likely, on the basis of the licensee’s knowledge and experience of the real estate market, that land may be subject to hidden or underlying defects, the licensee must either-

(a) obtain confirmation from the client that the land in question is not subject to defect; or

(b) ensure that a customer is informed of any significant potential risk so that the customer can seek expert advice if the customer so chooses

6.6 A licensee must not continue to act for a client who directs that information of the type referred to in rule 6.5 be withheld.

It is important to recognise that these are rules and whilst they need to be read in conjunction with the Act the fact is that such rules are never cut and dry as to the exact manner of their application. The article in the paper states that

“for example, an agent should be able to tell of a house is at risk of being a leaking building based on when it was built or what it is made of.”

If this was to be taken literally it would mean that every agent would tell every buyer that every home built over the past 25 years using a timber frame with a cladding system which is not adequately ventilated is potentially a leaky building! The fact is the only way to identify a leaky home is to undertake a professional survey by a professional company who, using testing equipment can establish the likelihood that the property has become effected by internal frame damage. This is exactly what a building report undertaken by the buyer should tell the buyer. There is no way a real estate agent can provide this service. They are not qualified on such matters nor put themselves out in the market to be surveyors and building inspectors.

Having said that the new responsibilities placed upon the real estate profession are there to safeguard the interests of the buyer and the seller, and this is where this issue becomes really interesting.

In the vast majority of cases involving a property transaction a property buyer is at the same time a seller and visa versa. So to think that sellers are not going to want as much professional disclosure as buyers is illogical. This is why the code of professional conduct and care speaks to the agent providing that to both sides. How the view that private sellers will somehow be happy with that when they are also buyers is hard to believe.

Overriding this issue in the context of private sales is the fact that the consideration in choosing to sell privately or through an agent is in the main not purely around the amount of disclosure or even the fee. The fact is negotiating a property purchase is a complex and time consuming activity which surprises the many people who think they can sell privately, and who then end up employing an agent. That is why still with all the greater access to open marketing on the web the number of private sales continues to be around 10% – very similar to most other countries internationally – selling a property is far more than just advertising, and equally should not be shrouded in attempts to deceive or hide key facts.


Are “Boom Times” back for real estate?

Posted on: November 12th, 2009 | Filed in Buying / Selling a home, Media commmentary

Today Westpac released a report on the property market foretelling a double digit property price inflation in the near term. A bold call when we are still only just 12 month post the lowest point in the property market for many a decade.

The article on headlines with a provocative title “Boom Times are back for housing” and will certainly generate a vast amount of comment.

I make no claim to be an economist and do not wish to challenge the assertions of the Westpac economists as to the probability of near term property price inflation or a subsequent tail off in late 2010. I do however wish to highlight some challenges to the data used as a substance to the claim – specifically around sales levels and listing levels in the market.

The opening paragraph of the report states:

New Zealand housing is displaying all the symptoms of a bull market. House sales have risen sharply, and now stand around their long term average. The time taken to sell has shortened. The number of houses listed on the market has fallen. All indicators are typical of a market upturn, and point to a significant price increase.

Let’s look at the facts behind these statements:

1. Property sales have risen – true. The sales for September were 6,464 this was 44% up on September 2008, just 15% up on September 2007, but was down 25% on September 2006. On an annualised basis the current 12 months reflect sales of 65,575 – the average 12 month moving average sale during the period 2002 to 2008 was 99,277. Therefore sales are picking up but stand well below long term average.

2. The long term average sale is best judged by the % of sales per year of the total inventory of all houses. There are currently around 1.53 million dwellings in NZ, over the past 10 years this inventory has risen by 180,000 new homes. The chart below shows the monthy sales of property tracked as a % of all dwellings in that month (Census NZ data).

NZ Property sales matched to dwelling numbers to Sep 2009 REINZ

This clearly shows that current sales are well short of long term average.

3.  The number of houses listed on the market has fallen – not true. The latest NZ Property Report published 11 days ago show that new listings are rising. However not quite as fast as expected by seasonal rise but still rising. What is more important and is as shown below the available inventory of property on the market is not falling.

NZ Property Report Oct 2009 Inventory levels

Inventory as measured in the number of weeks of available sales is a true measure as reflective of sales volumes and whilst no where near the heady peaks of 12 months ago the current level of 34.4 weeks is up from the lows of 6 months ago. The trend line is actually rising.

I think the important matter here is not the prediction of future prices; as many different people will have many different interpretations and predictions as the blog comments on will clearly show. The important thing is exposing the primary data in an open and transparent manner so people can make their own judgement as to where they think prices will go.


Property searching online vs offline

Posted on: October 28th, 2009 | Filed in Media commmentary, Website searching

The recent debate on this blog centered around claims by Property Press regarding the validity of research methodology would again appear to closely resemble a discussion around the seating arrangements on the Titanic, as the latest readership survey from Roy Morgan looms large as an iceberg.

The data of readership of NZ newspapers and magazines has been neatly presented by Lance Wiggs to show what amounts to in the main a pretty depressing picture of the printed media industry. When it comes to New Zealand newspapers analysing the 12 months to August 2009 as compared to a year earlier 19 newspapers showed declining readership with just 5 showing increased readership. When it comes to magazines 91 magazines showed declining readership with 50 showing gains.

In regard to the specific area of real estate the performance of the 2 key magazines of Property Press and Real Estate (regional Wellington magazine) were pretty much in line with industry trends, showing declines.

The weekly readership of Property Press fell by 38,000 from 273,000 to 235,000 over the past 12 months; the Real Estate magazine falling by 25,000 from 132,000 to 107,000.

These figures as presented in the chart below are matched to the visitor sessions experienced by online real estate websites as measured by Nielsen Online. The data shows the average weekly sessions hosted by each website over the same tracking period as the Roy Morgan readership survey.

So whilst the Property Press readership has fallen by close to 14% over the past year to a weekly average readership of 235,000; total web traffic to a group of 8 real estate listings sites has grown by over 20% to reach a weekly session total of 912,919.

The largest total sessions for real estate is recorded on the property pages of Trade me with a weekly average of 557,816 a year-on-year increase of 22.8%; comes in with a weekly average of 127,190 sessions per week an increase of 27.1% and then the largest company website of Harcourts had an average of 70,180 sessions per week an increase of 18.1%.

Further objective reinforcement of the shift from print to the web.


What value research when staring reality in the face!

Posted on: October 16th, 2009 | Filed in Media commmentary, Website searching

istock_000000839419xsmallThe recent debate with Property Press over the value of different methodologies of research are, on reflection a complete waste of time!

We could continue an online slagging match quoting every conceivable piece of research that can be dusted off and used to justify a position – as is often the case with research.

After all quantitative research is only the ability to extrapolate based on sample groups. However extrapolation is not an accurate science. You can never say with 100% confidence that what 1,000 people say they will do will be exactly what 4 million people actually do.

So instead of quoting research let’s for a moment consider facts:

In the last week (w/c 5 October) the following numbers represent facts (what actually happened) – not research extrapolation:

  1. A total of  4 million unique browsers from within NZ visited a total of over 350 websites monitored by Nielsen – this is the unique total many of these visitors will have visited many of these sites
  2. A total of 475,866 unique browsers in NZ visited one of the 25 real estate websites monitored by Nielsen – these are unique users who may have visited a number of the websites – but are not counted twice
  3. A total of 86,912 unique browsers in NZ visited the website of viewing 2.2 million pages and spending a total of 85.6 million seconds on the site during those 7 days

These are audited actual events and activity, they are not extrapolations based on the words “would you”. They are based on the facts of what people actually did.

One year ago, the week commencing the 6th October 2008 these were the facts:

  1. A total of  3 million unique browsers from within NZ visited a total of over 350 websites monitored by Nielsen – this is the unique total many of these visitors will have visited many of these sites
  2. A total of 361,032 unique browsers in NZ visited one of the 25 real estate websites monitored by Nielsen – these are unique users who may have visited a number of the websites – but are not counted twice
  3. A total of 58,298 unique browsers in NZ visited the website of viewing 1.5 million pages and spending a total of 54.2 million seconds on the site during those 7 days
These people using these computers made a positive decision in the case of those visiting to enter this website in an effort to search property.
I think these facts tell a very simple story – more and more people; more and more of the time; turn to the web to search for everything from flight tickets to books; to hotel reservations; to news and naturally and not surprisingly property information. This trend has one path.
  • To stand and deny it is to try and stand against a hurricane.
  • Here endeth this debate!

Beware the cashcow in the coalmine!

Posted on: October 14th, 2009 | Filed in Media commmentary, Online marketing

istock_000002421561xsmallThis headline is taken from the excellent book ‘What would Google do?‘ by Jeff Jarvis. It speaks to the danger lurking in industries that blindly continue to milk a cashcow of the old economy, without realising the oncoming possibility of failure driven by the game-changing impact of the web. As Jeff so eloquently puts it “They (those companies hell bent on protecting their cashcows) lost their destinies because they wanted to save their pasts. Protection is not a strategy for the future.”

It was clearly with this in mind that I read a somewhat surprising press release issued last week by the Property Press with the eyecatching headline

“Real estate survey – flawed, useless”!

The press release set out to discredit and challenge the Nielsen Online survey undertaken in May and June of this year (of which was a major sponsor) which provided insight into the attitudes and behaviour of property searchers in NZ. The results of the survey have been shared on this blog under the title of “Newspapers big losers as property searchers stampede online” as well as being printed in the REINZ monthly journal RE Magazine.

The survey was undertaken by Nielsen Online as it has been in each of the past 3 years.

Being completely open and transparent about the survey I can confirm that it was what is called an intercept survey. This type of survey will probably be familiar to many of you reading this blog post. You go to a site and a pop up appears inviting you to participate in the survey, naturally being the web the targeting can be made with pin-point accuracy in regard to targeting those people on a certain page.

In this regard the survey was not as the press release from the Property Press seems to imply, simply a survey “asking people online if they use online for searching for real estate“. The survey was far more comprehensive and credible than that. The methodology, sample size and error rate are detailed here.

One key question which the Property Press seeks to establish as being ‘flawed’ is the question regarding the selection of media consulted for real estate research in the past week. The chart below represents these results.

Nielsen real estate market survey - June 2009

The key fact here is that the question was not simply a yes/no – (did you use the web to search for real estate?) – rather, the question allowed for multiple answers reinforcing its value, as it allowed for greater insight into the mix of media used by property searchers.

The credibility of the research in general and this question specifically is not justified as the research methodology is sound.

In addition the fact that the research has been undertaken in each of the 3 preceding years utilising the same methodology only strengthens its inherent value. Presented below are the results of this same question in each of the prior surveys.

Nielsen real estate market survey 2006 - 2009

As can be clearly seen from the chart, that, although there are variances from year to year, the trends are patently clear.The usage of the web based options – specialist real estate websites / company website & search engines are growing

Print publications – specialist real estate magazines / community, local newspapers / metropolitan newspapers are declining. The one exception is company magazines.

I therefore stand by the assertion that “Newspapers are the big losers as property searchers stampede online” – to that I now add specialist real estate magazines. My view is that they are trapped as part of the cashcow in the coalmine syndrome!

I respect that this is how I interpret the findings of the Nielsen research, I also recognise that Property Press hold a different perspective and therefore I welcome them to engage in the debate here by posting a comment or response to which I am more than happy to debate and would naturally welcome others contribution and comments.


Is the housing market killing our economy?

Posted on: October 8th, 2009 | Filed in Media commmentary, Money Matters, Other interesting reads:

listener-magazine-coverThere seems to be a regular flow these days of articles that firstly prophesy the re-emergence of a property price bubble and secondly seek to berate the general population for “allowing” property to be leading us out of a recession instead of exports.

The latest media to ask this question is the Listener, which this week leads with a cover story “ How to stop the rising house market kill our economy

Dealing to the first of these issues, it is worth as ever looking at the facts.

The current price indicators of the market (REINZ and QV) are both showing a year on year recovery as detailed on the chart below. The REINZ median price showed in August a 5% appreciation, the first for over a year – the REINZ statistics tends to be more of a lead indicator as the data is more timely reflecting as it does the price of sales in the prior month.

NZ Property price - annual variance Qv & REINZ data

Not only are prices of houses only just beginning to show a year on year rise, they are still languishing below the peak of the market which regardless of which data set you choose to use is now close to 2 years ago.

Added to this the most recent sales data from Barfoot & Thompson showed that prices had actually softened again in September – down 3% from August; with their figures showing the current price some 8% below the peak of the market.

So I would have to say there is as yet now evidence of significant rise in prices – more a sense that prices have at this time ceased falling.

As to this notion that somehow we as income earning NZ’ers are in someways being frivolous and irresponsible in “allowing” what is seen as our “love of property” to damage our economy. Well even the Listener article if you read it through, tends to place more weight (based on the contributors) on our commodity based agricultural biased economy being the influencer of our currency turbulence rather than anything to do with house price inflation driven by easy money.

I cannot imagine that there would be anyone who would not want to see our exporters of premium high quality products and services succeed on a world stage and earn valuable productivity efficient earnings to raise our standard of living as the article cites. But to somehow expect all of us to somehow cease our inherent desire to find a home that suits our needs and in so doing spend what we think is a market price is ridiculous. After all there is nobody out there forcing anyone to buy any property and therefore market prices are a function of a willing buyer and a willing seller agreeing on a price.

As to the issue of investment property soaking up valuable credit that could go towards investing in productive capacity – that is an undeniable fact, that money would be better for the economy if it was able to flow to seed investment that can be productively used, but again we live in an open economy – part of a global economy with largely free trade in currency and goods. Like it or not, money will flow to where it can safely earn a rate of return that satisfies those that lend. In the case of banks as in the case of Japanese housewives their investment risk profile seems to suit mortgages rather than business loans.

As the article further highlights the single lever of the Reserve Bank being interest rates, which they use to manage the inflationary effects of potentially damaging house price inflation has a consequential impact on investment attraction in our volatile tiny currency. This seem then to be arguing as some emerging voices are highlighting the set of tools available to the Reserve Bank needs to be widened.


1 in 20 mortgagee sales may be wide of the mark

Posted on: September 27th, 2009 | Filed in Media commmentary

Sunday Star Times - headline Sunday 27th Sep 09Dramatic headlines leap from the cover of today’s Sunday Star Times ” Mortgagee home sales now 1 in 20″!

I fear I will begin to sound like a broken record, but are the facts really as presented in this headline? – the fact is that in July there were 321 registered title transactions in which the terms of the sale, as registered with the land transfer office, involved the liquidation of the title by the mortgagor of the title.

In the same month the Real Estate Institute members, who comprise all licensed real estate agents in NZ reported that the number of unconditional sales amounted to 6,014 properties.

Notice anything about these two sets of statistics? – whilst there is no exact breakdown to the mortgagee sales stats, there is no clear correlation that says all 321 sales were of residential properties, which is what the REINZ statistics measure.

The article does comment that just 18% (58) of the properties sold as mortgagee sales were classified as homes at which the property owner owned no other properties. This is the traditional perception of a repossession, with the consequential eviction of a family forced to relinquish their home in a mortgagee sale.

The fact is, that within the 321 sales registered as mortgagee are many types of properties or titles. These comprise development projects of apartments, non residential properties, investment properties and commercial properties.

So whilst there is no clear and truly accurate ratio, it would appear to be a tall ask to say that 1 in 20 homes sold in July were mortgagee sales – probably somewhat less.

By way of comparison, the number of mortgagee properties listed on this website has been monitored and reported regularly – the chart below shows the data right up until this weekend and clearly showing that inventory levels have fallen since the start of the year, equally as shown by the red line the level of keyword searching for mortgagee property on the site has been falling over the same period.

Mortgagee listings and search queries - Sep 2009

Returning to the newspaper article – the comment that “The effects of the recession are going to be felt by many for years to come” is true; for just as unemployment is a lagging indicator as it continues to rise as the economy starts to come out of recession, so it will likely be for mortgagee properties of all types.


Lehman Bros collapse and the impact on the property market

Posted on: September 14th, 2009 | Filed in Media commmentary, Website searching

NZ Herald - 14 Sep 09The NZ Herald article today tracking the fall out from the 15th September 2008 collapse of Lehman Bros cites the consequential impact on website traffic.

The specific chart to which the article refers is presented below. The chart measures the weekly total sessions (number of NZ website visitors) across a basket of 7 real estate websites – the leading sites including, trade me property, Harcourts, Open2view and other. The chart is indexed based on a rolling 52 week average to thereby exclude the inherent growth of web traffic and in so doing provides a clearer view of seasonality and market trends.

Real estate web traffic - total industry sessions 2007 & 2008

The key takeaway from this chart is that in comparing 2008 weekly traffic to 2007  it is very clear how the global economic recession significantly impacted property viewing online as a surrogate of consumer confidence in the property market either by active buyers or casual observers. The 2008 line starts the year below 2007 and never once does it really show any demonstration of exceeding that performance. Compare this to the latest chart for 2009 which shows the far more active level for this year to date.

The component of this 2008 chart that relates to the Lehman Bros collapse can better be seen in the exploded chart below.

Sep 2008 and the Lehman Bros impact on NZ real estate web traffic

Here is where the 2007 performance shows a more traditional seasonal upturn in the spring. For 2008 that upturn did began in late August with a strong couple of weeks until as shown the 15 September week’s performance kicked in. However from then on the differential performance to 2007 only grew wider and consequentially from an online searching perspective the real estate market failed to have a spring pick up – remaining very quiet through to the end of the year and the traditional seasonal downturn at Christmas.


What really drives the property market?

Posted on: September 14th, 2009 | Filed in Media commmentary

As the anniversary of the collapse of Lehman Brothers approaches this week, we are being warned just 12 months later to not get too excited that this “earlier than expected economic recovery” will lead to a false sense of security that prosperous times are just around the corner.

The key question though always seems to be – what are the drivers of economic prosperity or recession, or put it another way what drives the turning point that takes us from stable growth – to bubble – to bubble bursting – to recovery?

It was with this in mind that lead me to find this very interesting article published in the New York Times business supplement the other week by no less an economic luminary as Professor Robert Shiller – the individual who lends his name to the famous US house price index – the Case Shiller index.

The premise of his article is that whilst the drivers of economies are well known, what is little understood are the accelerants of such drivers. He describes social epidemics largely as feedback loops driven in part by the media (both mainstream and social media) whereby literally the occurrence of positive stories can add to and accelerate a sense of optimism which can drive further optimism; whereas the media’s coverage of economic collapse and recession accelerates this condition.

As he says in the article:

At first, the feedback explanation may sound too simple, and may suggest that the stock market and its turning points are easy to predict. But because day-to-day noise shrouds these changes, and because the stories change in their retelling and as new evidence emerges, the process is actually very complex.

This concept seems to in someways fit the scenarios observed here in NZ in relation to the property market. Back last year I wrote a post entitled “Media seriously impacts the psyche of NZ’ers when it comes to property“. This provided a perspective of the correlation between media coverage and the level of interest in property as represented by traffic to a collection of the leading real estate websites.

At that time back in April 2008 the property market was starting its slide and early signs were seen in the tailing off of property viewing online. Coming forward to today some 18 months later and with the benefit of hindsight the trend of decling interest in property can be clearly seen from the chart below which having begin in early 2008 ran through until early 2009 at an indexed basis less than 2008. However as the new year dawned and economic recovery started to be reported and talked about so the market as reflective of website traffic began to turn up – and up!.

NZ Online real estate traffic to Aug 09

This observation and correlation may well go some way to be provide some degree of support to Professor Shiller’s view.

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