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Archive for the ‘Real Estate Industry’ Category


NZ property market may well see a brighter outlook sooner

Posted on: April 10th, 2008 | Filed in Money Matters, Real Estate Industry

Some of the best debates on this bog have come as a result of discussions centered around the prognosis of the future of the property market in NZ. I have for the past few days been listening to podcasts and reading news article from international sources to endeavour to get a read on the longer term outlook for the NZ economy in general and NZ property market in particular. I have deliberately been avoiding the local media.

My take on what I have read and heard leads me to a belief that we have become far too introverted and are in danger of becoming the victims of a self fulfilling prophesy. The analogy I would draw is to an amusing incident that I recall was reported in the UK many years ago. At the time BMW had just introduced their econometer on the dashboard – a driver was stopped having brought a major highway to a grinding halt as he had become so fixated on this gauge, measuring his mpg; in an effort to maximise his economy that he forgotten that the consequence was he was driving at around 15kmph!!

Let’s examine some key facts – the health of the NZ property market is a function of the health of the NZ economy and affordability of housing is a function of the price of property and the salary levels of those looking to buy property. The “recession” or pseudo recession that is afflicting the US is a function of over exuberance, it is placing major constraints on the credit market. The sufferers of this are largely the consumer and not business. As I have heard business globally is performing exceedingly well making significant profits and in the case of US companies exceedingly good profits as so many of these companies are now significant exporters who will reap huge benefits from the low dollar.

The other major economies of China and India as well as Russia are all performing well; less so from export (although for Russia the oil and other commodities is their golden goose) as from significant domestic consumption which in the case of China is actually sucking in imports helping to balance their trade imbalance. The estimate for the growth of China is 9.4% and India 8% – both down on prior years but on the scale of their economies these growth rates equate to enormous growth in absolute dollars.

So what of the NZ economy in all of this. Well if you look at our trading partners you only need to look at the focus of the NZ business community who are in China this week to not only celebrate the signing of the FTA but to cement their already well established trading relations. Australia, our biggest trading partner is according to this economist report from the IMF predicted to continue to grow at a rate of 3.2% in 2008 and 3.1% in 2009, not far off the 3.3% average of the past decade. If our key trading partners are growing at these rates and we have the products from our agrarian economy to meet their need we should be able to tick along nicely for the next few years.

And let us not forget that we are not a solely agrarian economy – look for example at the super yacht industry, whilst it may not amount to more than a $100m a year industry to NZ it is globally riding high – this article in Time magazine highlighted how the $25 billion industry is being driven by the super rich of not the US but emerging markets. The statistic that grabbed my attention – there are over 85,000 people nowadays who have over US$25 million or more in liquid assets! – and this group is growing. To this elite group a super yacht from Alloy yachts is exactly the way to celebrate global success, and for NZ another demonstration of the skills of our yacht builders.

So what of the NCIER survey? Well to me it feels very much like the traditional survey response – when asked in the context of the global credit crisis and a protracted and severe economic downturn in the US – people focus on the econometer and take the foot off the gas pedal and before long there is a long line of gloom merchants stuck in the middle of the road!!

Now this greater confidence in the NZ economy to withstand these global shocks and continue to grow exports bodes well for business. That in its self will not solve the issues of affordability which does drive the property market. We will see the expected stagnant property market, off at least 50% in sales and coupled with this highly volatile prices. Considering all of that I would not be at all surprised that as we head into 2009 we will not be pleasantly surprised by our balance of payments and our companies strong profitability; which coupled with tax cuts borne of greater tax receipts from continued high employment and corporate earnings may well be significantly bolstering the take home pay of most of NZ thereby beginning to reduce the affordability gap.

Anyway just my take – as ever your thoughts would be of interest to debate the issue.


Mortgagee properties – interest grows in this challenging market

Posted on: April 9th, 2008 | Filed in Media commmentary, Real Estate Industry

In what is becoming a regular report on the consumer interest in properties featured on this website that are the result of mortgagee sales, I can tell you that last week represents a significant increase in awareness and interest. I suspect that a lot of the resultant spike in activity is a bit of “self fulfilling prophesy”.

Compared to the last 4 week average of around 1,000 keyword searches we had 3,431 keyword searches last week for the collective group of “mortgagee”, “mortgagee sale” and “mortgagee sales” – in total this group of 3 key words represented just on 13% of all keyword searches – one in 8 of all such queries.

In the same vein as the fact that this searching could well have been influenced by this blog, Bernard Hickey’s blog and TV3’s John Campbell article – the real estate agents would appear to either be finding more mortgagee properties to list – or as is more likely adding this keyword to their existing listings.

The number of properties on the website using the keyword of mortgagee has risen sharply to 174 from 154 last week.

Underlying all this is a key indisputable fact that whilst property sales are falling sharply (the next 7 days will likely show sales below half their levels of a year ago and a market heading for annual sales below 75,000) the website interest in viewing properties has not fallen. Quite the reverse weekly traffic is up around 12% compared to last year at this time with over 120,000 sessions served in the past 7 days collectively amounting to over 22,000 hours on the site!

5 website is owned by the industry – claims to the contrary are untrue

Posted on: April 4th, 2008 | Filed in Real Estate Industry, Website news

An article in today’s NZ Herald reports on claims made by a former employee of REINZ (Gordon Meyer) that this website is not owned by the real estate industry. I as CEO of Ltd can refute those claims completely.

The paper states that Mr Meyer claims that “REINZ went down the path of transforming itself into a money-making entity, investing $6-8 million in a property advertising website, Realenz (now, which members still did not own. It amended its constitution in the 1980s to enable it to engage in commercial activities”.

For the record RealENZ was the property listing website established by the Real Estate Institute of New Zealand (REINZ) in the mid 1990’s. It was the leading website for property for almost a decade during which time the REINZ held a key ownership position.

In August of 2006 the RealENZ website became following the establishment of a joint venture agreement between REINZ and Property Page (NZ) Ltd (PPL), forming the company Ltd.

PPL is a company owned by the following real estate companies: Harcourts, Harveys, Ray White, Barfoot & Thompson, Bayleys and L J Hooker.

With this ownership structure one can very easily see that this website company ( Ltd) is 100% owned by the real estate industry through some of the franchise groups and companies operating in the industry as well as the industry body which itself is owned by all licensed real estate agents.

The reference in the article to the degree of investment made by REINZ in the RealENZ website is something I cannot comment on as my accountability only covers the period of the operation of Ltd.

The article goes on to quote REINZ President Murray Cleland who took issue with Mr Meyer’s criticism, saying profit was never put before people. He said Mr Meyer was bitter and did not realise that was a huge success, with every major agency involved.

In echoing Murray Cleland’s comments I would support those who have supported this website by highlighting that in the last year alone the site has cemented its position in the real estate category as measured by Nielsen Online as the clear No. 2 website (behind Trade Me) attracting just on 250,000 unique browsers per month on average, a growth of 31% year-on-year ahead of the market growth of 21%.

Alistair Helm

CEO – Ltd


Will we see property prices rise before 2018?

Posted on: March 27th, 2008 | Filed in Buying / Selling a home, Media commmentary, Real Estate Industry

The opinion piece posted by Bernard Hickey on the Interest Rates blog yesterday titled “Don’t expect capital gains until 2018” has certainly captured the interest of main media and the public at large.

The premise of the article, which is well worth reading takes the position that affordability criteria sets the long term property pricing trend line. We are currently well off this line today. The likelihood is that unless unforeseen circumstances intervene it is unlikely that NZ property will re-attain their peak median price ($352,000) again until between 2018 and 2027 – a staggering 19 years at the most pessimistic!

Now I do not profess to be as close to the financial markets as Bernard, however I do consider myself sufficiently well read of the market factors today as well as being well positioned to see the trends in the real estate market through the website. I have also witnessed property markets falls – specifically having owned property in the UK in the late 1980’s.

The fact is whilst I completely agree with Bernard as to the reasons behind the current state of the market, the underlying drivers that have got us here and the factors weighing heavily on the future trends; I at this point tend to take a different view of the long term outlook. Whilst I cannot see any great silver lining on the billowing dark clouds ahead, I do not see such oppressive blackened overbearing clouds for the next 19 years!

Here’s my take on this situation:

To view the market as a homogeneous group is to over simplify, equally to segment the market too finely can lead to bias and misrepresentation, however I hope to make a point by doing a degree of segmentation.

Let’s for a moment look at the motivations of differing groups in the property market today.

1. For those that purchased their properties as a home to live in pre-2005, then a sale in today’s market or even next year’s market in the face of falling prices will only see them lose a paper value of their home. Should circumstances change for these people and they have to move house and sell; they could justify selling at what might appear to be a “paper loss”. These people are more likely to stay put and ride out what they see today as a storm – why sell?.

The net result for this group will be less people selling their home.

2. For those that bought between 2005 and 2007 – for these people I would suggest that they are pretty concerned and to some extent extremely worried as to whether they paid what now might amount to a too higher price for their property. They may be worried that the value of their “asset” may actually be worth less than their mortgage. For these people a psychological phenomenon will kick in where logic says sell now (to at least realise some net gain) however the reality is that they do not sell because they deny the reality of the situation and feel the urge to stay – this is what happens with shareholders that start to see stock prices fall, but for property this scenario will be compounded by the fact that a home is more than just a financial investment.

The net result of this is that this group of people will not sell their home unless driven to by extreme circumstances such as financial hardship.

3. The other group are people who are cashed up as investors looking to buy-to-rent or people who sold in the last 6-12 months and are now more cautious about buying, as well of course first time buyers. These people whilst less motivated to buy than a year or so ago will be keeping close tabs on the market. They will not be adding to the stock of houses on the market; equally they will not be taking properties off the market by buying property.

These 3 groups whilst not the most exhaustive set of players in the market would represent a a significant component of the market. The net impact of their actions will be to significantly reduce the stock of properties coming onto the market and equally significantly reduce the demand side of the market buying up properties.

As a measure of the skittishness of the market our website has seen a steady increase of properties being added at the rate of close to 1,000 per week taking the current stock of just homes for sale to over 65,000 from the total site inventory of 107,000. This represents a inventory of close to 12 months based on current sales level – this stock level will fall. Not as a consequence of sales, but as a consequence of the reaction of the groups above as they pull back and hunker down!

I would expect to see that in the next 6 months (especially heading in to winter) a continuing fall in sales volumes – this full year to around 72,000. A significant fall from the heady days of 2003 at 120,000+ and a level not experienced since 1993.

Prices will fall – we could well see median prices down from the current $337,500 to around the $300,000 mark. The big issue here is that with declining sales the median price point will become more erratic especially at a local area level where with small sales volumes individual sales skew the figures. We may well see some very inconsistent swings in prices. Compounding this will be the fall out from the speculative investment property sector collapse (Blue Chip etc.) This will drag median prices down as the majority of these properties are sub-median priced. This outcome could occur without any change in the average price for most of the rest of the market.

As caution slows demand and the “ride out the storm” mentality dries up listings; sales volumes could well fall to a level where a new state of equilibrium is reached and the market responds with supply meeting demand and the pricing logic kicks back in as people always need to move for a whole host of reasons. House purchasing is a naturally liquid and dynamic market and cannot be likened to other bubble markets (stock markets, tulip bulbs, precious stones), they cannot dry up. Homes are just that; a home – one of Maslow’s 3 primary needs and as such reflect genuine demand for a roof over our head either as a rental property bought to rent out to meet a rental demand or a house to live in.

The view that we will see a stagnant property market for near on 20 years is for me too close to pure economic theory of straight line graphs, and too far removed from reality – we live in a global connected world and a global economy with enormous mobility and liquidity – too much of the global economy relies on financial service which themselves rely on property as a key investment source for the property sector to stagnate. Don’t get me wrong – the future is not bright – but to say we are all going to have to wait 10+ years before we can move house to enjoy capital gain is for me a hard pill to swallow – it may well be a more traditional 3 to 5 cycle of which the remainder of 2008 & all of 2009 are not looking that pretty.


A tough year ahead for real estate agents

Posted on: March 25th, 2008 | Filed in Real Estate Industry

If you have the impression that every other person appears to be a real estate agent these days. The truth of the matter is not quite as it may at first appear!

In fact it is quite likely that by the end of this year you may well know more ex-real estate agents than employed ones. The impact of the slowing property market will hit the employment of agents hard this year with anything up to 3,000 potentially leaving the industry.

The reality is (as I have been told many time by real estate agents) real estate is a simple business, not an easy business.

With low barriers to entry, this industry tends to suck in new aspiring agents as the market grows; and equally contract quite considerably as the market cools. This agility to react to the market is a double edged sword, allowing the industry owners to quickly add agents as contractors whenever they want (or don’t want!) and yet at the same time removing the motivation for training and development so critical in enhancing the professionalism of any industry.

Looking back over the past 7 years shows some interesting statistics on the employment of salespeople in this industry.

Real estate salespeople stats in NZ

At the start of this decade the industry supported some 12,000 salespeople (red line on the graph) who on average attained an estimated average gross income (a simple calculation of total property sales per agent factored for net agent commission) of $22,000 (black line on graph) – interestingly at that time a level below the average income of $24,300 for all working NZ’ers.

The next few years as the property market took off, with sales (blue line on graph) and prices growing at record levels the industry proved a goldmine for those agents already well established – seeing estimated average gross income rise steadily to $47,000 in 2003 coinciding with the peak of sales volume. This income level representing a premium of 70% to the then average income of all working NZ’ers. Not surprisingly then, just as the sales volume hit its peak in that year the industry had already started to attract more and more agents – in 2003: 14,000; 2004: 16,000; 2005: 17,000 and in 2006: 18,000.

As the sales volumes began to drop however average gross income for those in the industry remained at a respectable level of $42,000 for the years 2004 to 2007 as median prices continued to grow, although during this time the average income for all workers rose from $29,000 to $35,000 reducing that once elevated premium of 70% to just 18%.

At the end of last year there were just under 19,000 real estate salespeople in this country, that level of employment is unsustainable as the market continues to soften. The first two months statistics of sales for 2008 show a likely total year sales of 72,000 based on seasonal factors so far. That would see a massive 22% decline in sales volume, this with a potential fall in median prices could see the total sales value of the market fall by upwards of 25% – this flows directly into the income of this industry and the earning potential of agents.

So the question is – what will be the fall out for real estate agents in 2008? – early signs already show a reasonable exodus from the industry potentially of those for whom real estate was not a full time career. Additionally rationalisation, acquisition and liquidation among companies may and will occur. This could all end up with the number of salespeople contracting by up to 3,000 to closer to 16,000 – even then for those left in the industry the estimated average gross income is likely to fall to less than $37,000 – pretty much back to the average workers income.

Whilst this may make gloomy reading for potential new real estate agents, for those that remain in the industry it will provide a much needed opportunity to demonstrate their unique skills and thereby grab a valuable opportunity to improve their position. For as ever with industries with low barriers to entry when the going gets tough the ones that stick it out are the ones who have the right skills and the right attitude to be successful – a position that hopefully will allow this industry to enhance its reputation and professionalism.

(Statistics are drawn from Department of Labour, REINZ, Statistics NZ and own statistics)


Searching for mortgagee sales?

Posted on: March 18th, 2008 | Filed in Real Estate Industry, Website searching

This is a short update to the post of last Tuesday. With the assistance of Bernard Hickey at The Rates blog we have been tracking the incidence of web searching for “mortgagee sale” properties.

On the number of listings featuring the word “mortgagee” has risen from 149 to 151 in the past week – not statistically that relevant as the total listing on the site has increased over the same period by 879 to 106,212.

What is slightly more interesting is the level of activity of people searching on the site using the word “mortgagee” – this includes mortgagee sale / mortgagee sales / mortgagee.

In the past 7 days over 1,000 searches have been carried out for this phrase a 27% increase in a week. This compares with a slight fall of 8% in total number of all searches.

There is clearly no doubt that consumers are searching more actively on the site for mortgagee properties – its was the #1 search for the week representing 1 in 20 searches. But was this a function of genuine demand or is this blog and Bernard’s blog driving people to test our site??

More to follow next week…………….


Slower property sales not affecting all sectors equally

Posted on: March 16th, 2008 | Filed in Money Matters, Real Estate Industry

The property sales stats released this week by REINZ showed a total of 6,356 sales for February 2008, representing 3,000 less homes sold in the month as compared to February last year. The figures for the rolling 12 month total show a 17% decline from a high of 104,675 in the 12 months to Feb 07 to just 86,720 for the latest 12 price segments in NZ

However as ever behind the numbers lurk very interesting trends. The key one that caught my eye was the segmentation of sales by price band. The fact is the top end of the market is not suffering as acutely as the sub $400,000 sector. This was interestingly intimated in a Herald on Sunday article today which focused on some high end developments which show continuing demand.

The sales stats by price has only been reported by REINZ since mid 2005 and shows the price bands of (i) less than $400k (ii) $400k to $600k (iii) $600k to $1m (iv) $1m+.

The fact is that whilst there has been a 17% decline in overall sales across the country comparing a rolling 12 month period, the high end sector has continued to enjoy growth. Each sector tells an interesting story.

$1million dollar plus properties: Over the past 12 months this sector has seen a 10% growth with 2,725 properties sold. Whilst representing just 3.1% of all properties this sector has grown from less than 2% in 2005. Over the course of the the past 12 months an average of 227 properties over $1m have been sold each month in NZ .

$600,00 to $1million properties: Over the past 12 months this sector has seen the fastest growth at 11% with 9,735 properties sold. This sector of the market represented 8% of sales a year ago and today represents 11% of sales.

$400,000 to $600,000 properties: These properties are above the current median price of $337,500, however their sales represent nearly a quarter of all properties sold in NZ in the past 12 months, and have shown a volume fall in sales of 5%, less than that of the total market.

Property below $400,000: This sector is the largest in the market, in the past 12 months 53,357 properties of this value were sold – a significant fall of 25% in sales volume compared to 12 months earlier. It can clearly been seen that this sector representing slightly less than 2/3rds of the market is were the real weakness is.

The data provided in the REINZ stats does not go as far as to identify median prices per price band (maybe this could be of value to industry observers). However one means of looking for a surrogate for such information is to look at average sale price vs. median price. Clearly the median price currently at $337,500 is showing early signs of falling this year, however the average price of all property sold in NZ as reported by REINZ is actually holding reasonably well, with a figure of $415,744 for the month of February. The graph below shows the tracking of median vs average for a 3 month moving average for the past 2 years. The upper blue line is average sale price, whilst the lower red line shows median prices.

It would be safe to say that the gap is not closing, adding weight to the view that the weakness in the NZ property market is primarily at the bottom end.



NZ’s Property slump – compelling facts cannot be ignored

In the past on this blog I have accused the media in general of self serving sensationalism when it has come to reporting the state of the property market in NZ, and the likely path that this market will take in 2008.


Well now is the time to come out and say congratulations to Esther Harward, the feature writer of today’s headline story on the Sunday Star Times entitled “Snapshot of a Property Slump“. The article is balanced and factual, it is unemotional and as someone who has been paying close attention to this market place and commenting on it on this blog in posts such as “Will 2008 see house prices rise or fall?” “Is NZ facing an impending property crash?“, I can say I agree 100% with the article.

NZ is in a property slump. That word is well chosen – it is balanced.

We are not in the midst of a crash. We will likely see a more subdued market than we have witnesses over the last 5 years. Some properties in some areas of the country will experience price falls. Others will be able to hold a steady price at a much slowed sales pace; whilst as the article states others will be havens of opportunity which may well see some inflation pegged growth. The net impact of all this through the year will be shown in the aggregated median price and total sales both falling – the article estimates prices by as much as 10% – that is possibly quite likely; taking last months median price down from $340,000 to around the $300,000 level – the kind of levels last seen in early 2006.

The NZ property market is not one market but many thousands of markets, each with their own characteristics, drivers, demands and appeals. However all are impacted by universal issues such as mortgages and the economy. The latter is becoming more critical every day as rates continue to rise. The Reserve Band is currently hesitant as to whether to hold these high rates and risk the dollar’s spiraling appreciation and consequential “crash landing recession”; or whether to loosen rates as the US is currently doing and in so doing allow inflation to become unchecked. A tough call as ever for Alan Bollard.


The Joneses (part 2)

Posted on: February 20th, 2008 | Filed in Media commmentary, Real Estate Industry

I am personally surprised by the lead article on the Herald today titled “Joneses had loss of $6m on books“. The articles quotes Brian Gaynor – a regular contributor to the Herald with the following comments:

He issued a commentary on the collapse, saying the liquidation should give a clear message that entrepreneurs had to take a long-term view when contemplating listing.

He also criticised the role of independent advisers who had valued the company, raising questions about the report prepared by WHK Corporate Finance on January 30.

What surprises me is what is the big story? – this reverse listing was supported by a detailed prospectus and analysts report to which he refers. This was public information (I got a copy) – anyone proposing to invest would have received this information and made a judgment as to the risk in investing. For Brian to say “entrepreneurs had to take a long-term view when contemplating listing” is a little bit stating the obvious, that is why they are entrepreneurs.

Also in making a headline of a “$6m loss” and saying $3.2m had been spent on marketing as if this was inappropriate – their business model needed heavy up front investment – this is what they did, pretty clear I thought.

I also don’t think there is any grounds to criticise the analysts, they put a future value of $14.4m – it was a future value based on future sales and revenue and to criticise them for that is a bit illogical.


The Joneses – a review of their impact on real estate in NZ

Posted on: February 18th, 2008 | Filed in Real Estate Industry

the-joneses.jpgThe Joneses ambitions and impact on the NZ real estate market ended today with the removal of their website and the notice to vendors that they had placed the operation in the hands of a liquidator. Just 18 short months ago The Joneses burst onto the real estate scene in flamboyant style very much reflective of the background of the key directors Chris Taylor and Andy Haines whose expertise in consumer goods’ marketing showed through so well in the very much in-your-face advertising strap line of “Flat fee – Not fat fee: Real Estate Reinvented”.

In a rather prophetic foreboding of today’s notice the prospectus for The Joneses reverse listing on the NZAX was titled “Reinventing Real Estate” some might say a rather work-in-progress judgment on their ability to truly reinvent real estate.jones-profile-document.jpg

The Joneses were an agent-of-change negatively impacted by the combinations of a weakening property market and grand plans requiring too great an up-front investment for the original shareholders to fund.

So what was right about The Joneses and what was wrong – here is an opinion piece from an interested observer’s point of view as I have watched their progress over these 18 months.

The proposition for The Joneses was a simple as it was compelling – Chris Taylor explained it to me a year ago. He said – “5 years ago the average commission on the average NZ property sale was around $6,000 – the industry at the time was successful. Why then 5 years later when costs have not markedly increased do commissions now total $12,000”? – it was this premise that drove to The Joneses offering of a flat fee of originally $7,995 – recently increased to $8,995 to sell any home regardless of selling price.

The fixed price was not the only point of difference to traditional high street operators, The Joneses took true customer service to the heart of its business – they chose to employ their staff, rather than adopt the industry tradition of commission based salespeople who are all independent contractors. The Joneses premise was employ capable people. Pay them a good salary. Motivate them through incentives based on customer service and utilise skills efficiently for employees to work together in teams. There is a specialist salesperson to seek listings. A specialist negotiator to aid the transaction process. There are dedicated marketing individuals and a central call center come customer management center providing one point of contact for sellers and buyers alike.

The Joneses model is or was by no means unique. Its closest relative is Foxtons in the UK – this hugely successful real estate company puts the same focus on consumer service and brand marketing, it has been around for over 25 years and currently lists over 40,000 properties for sale or rent per annum. They like The Joneses employ salespeople and motivate them for exemplary service. foxtons-uk-offices.jpgThey have a highly web-centric service environment complemented by smart customer friendly high street meeting places (the word office does not do it justice). Their fees are scale based reflective of property selling price but are equally a lower fee than traditional real estate companies.

Now the interesting deeper parallel between Foxtons and The Joneses is the fact that based on the success in London, Foxtons ventured to New York state in 2004 with a staggering offer to the US public with their new breed of real estate pitched with a 2% commission on sale – remember the US market is traditionally a 6% commission market with a buyers agent and sellers agent each getting 3% to facilitate the sale. Now as a function of the US market and high overheads Foxtons in the US closed its doors in September last year putting 500 employees out of work.

So what did The Joneses get wrong?

I believe their weakness was a function of the current market, not their model. Unfortunately time was not on their side. If they could have had another 12 months of a steady market to build brand value and establish word of mouth then their ambitions could have been realised. They offered a compelling proposition of professional service and powerful brand advertising, the latter would have become deeper ingrained in the consumer’s mind within another year. There have been questions raised as to the quality of their service and people’s acceptance to the use of a call center when people expect to be able to speak directly to the listing agent who is working on behalf of the vendor, but given time these would have been minor issues.

What The Joneses got right was their ability to grab the media attention and this they did to great effect at the time that the government was seeking input into proposed changes to the real estate act. They showed a fresh and appealing face to an industry that is seriously in need of a make-over. They set about offering a clear offer at an affordable price. The fact is the numbers though did not stack up.

Reviewing their prospectus document of just a month ago showed that over the period from Sep 06 to Nov 07 they achieved a total sales of 433 properties grossing them $3.5m – as at today they had 297 listings on spread across the 4 major centers of Auckland, Wellington, Christchurch and Dunedin. With a staff of 80 employees though; the pressure on The Joneses to deliver sales was critical as the break-even point was around 125 sales per month, not an insurmountable target which would have represented a 1.5% market share, however hard to attain in a slowing market when you have yet to change entrenched mindsets borne of many decades of established practice by the major franchise groups.

As a closing comment I think it is to the credit of all the directors and staff of The Joneses for having the passion and commitment to “give it a go”– and as someone pointed out to me today when was the last time a high profile company went into liquidation and you find the major shareholders and directors prepared to front the media. I can’t recall Bridgecorp fronting up!

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