The Unconditional Blog

The impartial voice of the industry

 

Archive for the ‘Regional News’ Category

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Queenstown property report – Sep 2008 (Correction)

Posted on: September 14th, 2008 | Filed in Regional News

I am very conscious that in order to be able to uphold the principle embodied in the tag line of this blog of “the impartial voice of the real estate industry” I need to be seen to be open, authentic, honest and above all accurate in reporting especially when it comes to statistics.

I posted a detailed analysis of the Queenstown Lakes region last week, accompanying the post was a press release which generated a fair amount of national and regional media mainly centered around the headline that stated that:

For sale sign on 1 house in every 7 in Queenstown Lakes

This statistic was based on the total number of listings featured on the realestate.co.nz website at this time for the region which total 2,342. From that total we apply a conversion factor as a number of properties are listed by multiple agencies resulting in duplicate listings. The net figure applying the conversion factor was 1,939 properties. We then took from 2006 Census the number of dwellings in the region and added those under construction which provided a total stock of 13,473 dwellings. This then gave us our 1 property in 7 statistic (actually 1 in 6.82).

This week whilst in Queenstown presenting to local real estate agents, I had the opportunity of discussing these statistics with local business owners. During this meeting they were helpful in highlighting an error in this calculation which I think is important to detail. Rightly they highlighted that Queenstown has a large number of apartments and units which whilst being listed for sale by agents are not classified by census as a dwelling as they are classified as visitor accommodation. With this in mind I would like to revise the statistics for the Queenstown Lakes region – there are currently 1,448 properties for sale in the region net of apartments and units and removing all multiple listings. This means the headline for the press release should now read:

For sale sign on 1 house in every 10 in Queenstown Lakes

The actual figure is 1 in 9.3 properties. I apologise for any confusion or missinterpretation these original figures presented.

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Southland property report – Sep 2008

Posted on: September 11th, 2008 | Filed in Regional News

The Southland region has been one of the most active real estate markets of the country over the past couple of years, particularly with regard to investment properties bought to serve the burgeoning student accommodation market.; however like many parts of the country the region has seen a recent slump in sales now averaging less than 150 per month a 45% decline as compared to last year. The latest stats for August showed 134 sales across the region.

Matched with this softening of the market has been the rise in the inventory as reflected in the blue bars of the chart below. Whilst the last 4 months has begun to see a falling off of this level of inventory, property sales show no immediate signs of an upturn.

Looking back to the first half of 2007 saw a keen “sellers market” were the level of unsold properties hovered around 700 properties in the region representing a very low level equivalent often to less than 10 weeks stock – this level was at the time amongst the lowest in the country (the national average at the time was 20 weeks (4 months). As sales slowed through late 2007 and into 2008 the inventory levels crept up and up to a situation now with around 900 properties for sale representing just over 28 weeks’ worth of listings. This level whilst higher than a year ago still represents a comparatively low level when compared to some regions (most notably Queenstown Lakes which currently has over 119 weeks or 2 years of inventory).

Reflecting the slowing sales of property the level of website visitors viewing Southland properties has fallen over the past year, from an average of around 7,000 monthly unique visitors during last year; to a currently level over the last 3 months down some 40% with around 4,200 per month. The graph below plots this comparing Southland (blue columns – right hand axis) with total website traffic nationally (red line – left hand axis)


Whilst the number of domestic web visitors viewing Southland property has fallen, by comparison the level of international viewers of Southland property has maintained a steady representation of the total as shown on the graph to the right with international visitors now averaging 37% of all visitors (blue bars), well ahead of the average for the whole website which sits at just around 30% (red line).

Properties of interest

Within that rich portfolio of over 900 property on the market featured on the website at this time for the region there are some very interesting facts accessible through the website to tempt buyers.

The most popular Southland property on the site is this lovely property in Riverton. Currently being marketed by Locations, this 5 bedroom property has received over 4,600 viewings since being listed.

Of these visitors a high proportion have visited to view this property from overseas as per this graph for the listing which shows the traffic from each of the top 8 countries over the past 7 days. Viewing from the USA seems to be evident on this listing.

Naturally the question always goes to the most expensive and the cheapest property in the region – well for this 4 bedroom 380m2 home takes the top slot currently being marketed at this time by L J Hooker in Invercargill for $1.4 million. Complete with 33 acres this would certainly make for a great lifestyle.

Whilst at the other end of the spectrum for just $49,000 you could be the owner of this wonderful piece of art deco construction in Ohai currently being marketed again by Locations in Invercargill. Whilst the agent indicates a bit of TLC is required it does have the virtue of having 3 garages – be careful or you could end up spending more on the cars in the garage than on the property, but then you would be the envy of the Hawkes Bay fans of this classic architectural style!

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Queenstown property report – Sep 2008

Posted on: September 8th, 2008 | Filed in Regional News, Website searching

The Queenstown / Otago Lakes region has seen its fair share of property booms over the past decade. It has become a global vacation hotspot and property development has been dynamic. Now by combining web statistics with industry information we can provide some valuable insight into the market and the interest expressed through website visitors to this beautiful part of the world.

From a real estate perspective the local market of the Queenstown Lakes region mirrors very much the national market – the graph below shows in the red line the significant fall off in sales volumes of residential properties in the Otago Lakes region over the past 18 months. Matched with this softening of the market has been the rise in the inventory as reflected in the blue bars of the chart.

In the first half of 2007 buoyed up by an active sellers market the level of inventory was steady at around 1,800 listings in the region representing around 42 weeks of stock – an admittedly high level as compared to the national average at the time of 19 weeks (4 months). As sales started to slow through late 2007 and into 2008 the inventory levels crept up, and up to a situation now with around 2,300 listings representing just over 119 weeks’ worth of listings, based on current sales activity.

Whilst the current market is relatively quiet in terms of actual transactions, the website activity continues to be focused to overseas visitors. This region of the country is one of the most popular with overseas web visitors – attracting not far off one in every two visitors to these properties in the region. The graph below shows the comparison of the Otago Lakes district as compared to the national perspective of the whole website. The blue bars represent the monthly % of visitors to the website looking at properties in the region, as compared to the red line which is the % for all properties on the website. Both figures reflect the growing interest from overseas, more as a function of the websites appeal and global linkages.

As to the source of this international interest it is valuable to analyse the make up of this 45% of the visitors viewing the website from overseas. The top 3 countries visiting the site are consistent across all regions of the country – UK, Australia and USA in that order, the top 10 countries are represented in the chart below.

It is interesting to see how interest from certain countries has changed comparing 2008 with 2007 – most striking is the growth in interest from Hong Kong now the 5th most popular country source of visitor and over 170% up on a year ago. Despite the large % growth represented by Hong Kong most significant in terms of quantum of visitors is a decline in traffic visiting the site from Australia, down 41% with just 2,500 visitor sessions in the 2nd half of 2008.

As highlighted earlier the website can be a valuable lead-indicator of potential future activity, primarily about the level of demand as measured in website visitors and enquiries sent from the website to agents regarding listings on the site in the form of emails. This tracking shows some interest recent trends from this index chart on the right:

Whilst the level of enquiry fell away markedly (when measured as an index of average monthly enquiry) during the autumn and winter period of this current year; the month of August has seen a robust boost in email enquiries being sent to agents – potentially leading to a degree of a spring boost to flagging market activity.

Properties of interest

Within that rich portfolio of over 2,400 property listings on the website at this time for the region there are some very interesting properties on the website to tempt buyers.

The most popular Queenstown listing on the site is this striking property in Gibbston on 7 hectares. Currently being marketed by Brown’s Sotheby’s, this property is on the market for $3.25m.

The listing has received over 6,600 views since being listed. Of these visitors a high proportion have visited to view this property from overseas as per this graph for the listing which shows the traffic from each of the top 8 countries over the past 7 days.

Naturally the question always goes to the most expensive and the cheapest property in the region – well for $8.95m this 4 bedroom 385m2 home takes the top slot. Out of the top 20 most expensive properties on the site a whopping 25% are in this Otago Lakes region.

Whilst at the other end of the spectrum for just $35,000 and a lease cost of $2,010 per annum you could be living in Arrowtown in this 2 bedroom cabin.

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Auckland property market potentially showing signs of stability

Posted on: July 4th, 2008 | Filed in Buying / Selling a home, Real Estate Industry, Regional News

The sales figures for Auckland properties as reflected by the monthly figures released today by Barfoot & Thompson certainly show the continuing sluggish property market with just 556 properties sales in June. This brings the total for the first 6 months of 2008 to 3,363 – a decline of 48% from the same period last year which saw over 6,500 sales.

The figures though on further examination do show some interesting early trends which could reflect a more stable market – one where a smaller set of buyers and sellers are meeting the market at a realistic level.

This pair of graphs track the moving annual total of sales volume and sales value as reported by Barfoot & Thompson over the past 12 months. The blue horizontal bars representing the sharp decline equally reflecting the contraction in real estate business, in the case of sales value from a high of an annualised $6.3 billion to the current level of $4.2 billion.

However when examining the monthly variance to prior year as shown by the yellow line the analysis indicates that the rate of decline in the case of volume sales in June was less severe than for the prior 2 months. Certainly the reporting period is beginning to track against the first months of decline this time last year, however it does at least show some signs of a base level potentially.

The average sales price monthly variance does show a continuation of the range between 0 and a negative 7 percent, with June down 2.3% as compared to June 2007. Certainly not the heady growth seen over the past 3 years, but equally not the crash as yet predicted.

The coming months will be particularly telling with as ever a deficit of buyers eager to negotiate with a continuing surplus of sellers.

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Mortgagee mansions! – the truth is somewhat different

Posted on: June 8th, 2008 | Filed in Media commmentary, Money Matters, Regional News

The front page article of the Herald on Sunday proclaims – “Mortgagee Mansions – rich pickings as the wealthy are forced to sell”- well it certainly grabbed my attention this morning as I am sure it did for countless other folk as they sat down to learn yet more about the fall out of the global credit crunch.

The article upon closer reading seems to be full of “shock and awe” but equally a lot of people saying “we don’t have that statistic or this statistic” – yet despite that the article claims that the fall out in the housing market is being felt more noticeably than many thought at the top end of the market.

So with the benefit of the fact that this website is the most comprehensive real estate listings website in NZ (currently with over 108,000 listings of which 79,000 are homes for sale – a clear 35% more listings than any other website) I thought it would be of benefit to look into the current 250 mortgagee listings on the site to see how close to the truth the article in the paper is. Of the 250 listings – 206 are homes, 13 are lifestyle properties and 31 are sections.

Firstly Bernard Hickey’s comment in the article that the most pain is being felt in Auckland is absolutely right, with more than 50% of all mortgagee properties being found in Auckland. Although to put it in perspective there are 106 which as a segment of the current 16,181 homes for sale in the region is actually only 0.7% or 1 home in every 153 homes.

Excluding Auckland the remaining 100 homes are spilt across the rest of the country in a fairly even distribution – the South Island has 36 or 0.3% of all homes for sale; and the balance of the North Island excluding Auckland has 64 at the same 0.3% of all homes for sale.

The only areas of the country to come close to the Auckland level are Bay of Plenty, Canterbury, Central North Island and Manawatu / Whanganui – all showing around 0.4%.

In terms of pricing the facts paint a vastly different picture to that of the newspaper article. There are just 10 mortgagee properties being marketed with an indicative price over $1m. As a proportion of the 4,538 properties currently for sale across the country with this level of asking price they represent just 0.2%. On the other hand the average price of all mortgagee properties on the site is $378,000 – well below the average price as reported by REINZ for April which was $427,000 (note this is the average price, not the median price).

Clearly the bulk of the properties subject to mortgagee sale today are in the sub $400,000 price bracket – 158 of them representing 0.9% of all properties in this price bracket.

So with the benefit of a little more research the newspapers could have provided a little more depth of information to assist their readers be better informed about the property market – but then as they say – why let the truth get in the way of a good story – especially when it can grab headlines to sell newspapers!

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Buyer interest for Auckland property remains sluggish

Posted on: June 5th, 2008 | Filed in Buying / Selling a home, Regional News, Website searching

The latest data released by Barfoot & Thompson today continues to show a very soft property market within the Auckland region, and in some way foreshadows the likely story for the national picture to be presented by REINZ in the coming weeks. Just 515 properties were sold by Barfoot & Thompson in the month of May representing a drop of 53% as compared to the figure of 1,100 in May of last year.

A key consequence of the slowing sales is the ballooning stock of property on the market. Currently on the site there are 18,695 residential properties for sale across the Auckland region, some 3,500 more properties than this time last year. Based on the April 2008 REINZ sales figures the current stock of properties represents around 13 months stock, itself up from 8 months stock levels at the start of the year.

The other interesting fact is the extent of property searching for homes in the Auckland region. Seen below on a comparative basis to last year with 2008 represented by the red line, Auckland property is attracting proportionally less web viewings as compared to the country as a whole.

Auckland property web traffic - May 08 realestate.co.nz

It is also interesting to reflect upon the seasonal nature of viewings of Auckland properties; although caution should be drawn to the expanded scale of the graph showing as it does a peak of 37% and a trough of 34% during the full year.

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Auckland – key pointers to future growth and real estate opportunity

Posted on: April 23rd, 2008 | Filed in Architecture & Construction, Media commmentary, Regional News

The front page of the NZ Herald yesterday highlighted some telling indications of future sustainable drivers of the Auckland and NZ real estate market. For whilst we are in the midst of a seriously stalling property market, you have to look to the future to see where this market may be 5 years from now.

Proposed Westfield Tower downtown Auckland NZ HeraldThe lead article featured the artists impression of the proposed 41 storey office and retail development on the Downtown Shopping centre. This development coupled with the 67 storey apartment tower at the Elliot are being proposed by developers who are not novices to such developments. They are making proposals having spent many thousands of man hours and potentially millions of dollars researching the key drivers of demand in the commercial and residential market over the next 10 to 20 years – their verdict is clear. Auckland is growing and will continue to grow, as a consequence it will need places for people to work and places for people to live.

Adding to this list of new progressive looking developments is the latest proposal for a harbour tunnel to provide the solution which is so desperately needed, to solve the traffic issues of Auckland. This proposal following hard-on-the-heels of similar proposals foretell the likelihood of a second harbour crossing actually being built in our lifetimes. Again the sustainable drivers of a growing population and growing economy in the longer term more than justify this likely multi-billion dollar investment.

Alex Swney Heart of the cityFurther adding to these future developments was the excellent piece penned by Alex Swney celebrating the completion of the 5 year refurbishment of Queen Street as the epicenter of Auckland’s retail and commercial heart. As CEO of Heart of the City and passionate Aucklander (as well as mayoral candidate) Alex has admirably championed the vibrancy and vitality of this precinct and made what was once a dark and dull “bitty” shopping and working environment into a bright and interesting metropolis. The proof to this regeneration and vibrancy as Alex says is best reflected when you:

“..talk to any realtor and they will tell you of the heightened level of interest from major international brands to secure Queen St space as it boasts pedestrian counts up to 10 times higher than any other high street in the country, underpinned by 80,000 workers, 70,000 students and 20,000 residents.”

As Alex says Auckland is growing up, it is no longer the difficult adolescent, highly self conscious; it can mix with the best in the world as a center of business and lifestyle.

In terms of the assessing the future have a look at the initiative set up by the regional council entitled “Auckland Plus” designed to articulate the business proposition for Auckland. This is the showcase of how Auckland can and does promote itself in the business of cities fighting to attract talent, capital and business to grow the future economic wealth of this city and this country – a highly competitive arena in which to compete.

The future of NZ is inextricably tied to the future of Auckland and from these developments we can start to see the other side of this current economic and real estate slump, a side that is based on sustainable drivers of economic growth which always have a flow on effect to real estate.

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The joys of Invercargill

Posted on: February 22nd, 2008 | Filed in Buying / Selling a home, Property Investing, Regional News

Politics brings out the worst in people, but you have to have respect for Tim Shadbolt – he is the very epitome of a walking advertising billboard for that Southland city.

Yesterdays’s challenging interjection in the government’s housing affordability inquiry to which I have referred to on more than one occasion on this blog is another classic example of this one man promotion machine capturing the headlines – this time is is “Auckland to blame for country’s housing woes”. He claims that in Invercargill many families could easily afford to buy a three bedroom house for under $150,000. This statement got me thinking as to what you could buy in Invercargill for this money – quite a bit really!

Currently there are 35 houses in Invercargill city with 3 or more bedrooms, by comparison Auckland city has zero and Tim’s former home Waitakere offers no options.

(By the way if you do a search out of interest for Auckland or Waitakere, please be aware that you will find homes in this price range, but as you will see they look to be a bit too good to be true. That is because some agents tend to send us information on pricing for which the range is a little large, we unfortunately have to take their content at their word and display it. Our role cannot reach to auditing content – we get somewhere close to 7,000 new or amended listings daily. Although having seen some of these “error” I will highlight this to the respective agents today!)

This selection in Invercargill though is very interesting, how about this 4 bedroom home in Appleby at just $142,000 this is great value – beautiful decorated, but not sure about the duvet cover!

If you don’t mind the tin fence then this one in Appleby at just $140,000 would seem to be a steal given it has a fixed tenancy paying $190 per week – that is a 7% yield! Would have looked a bit better if the tenant had made the beds before the photos were taken!

But my winner would be this fabulous art deco 4 bedroom home in Bluff – shame just the one photo but it is a classic and a cheque for $140,000 will secure.

Just before we all rush off to Invercargill with our sacks of gold to swell the local council’s coffers with due rates and licensing trust contributions, I would like to correct Mayor Shadbolts assertion that the only other countries in the world with a similar concentration of population in a single city were Uruguay, Armenia, the Bahamas, Iceland and the small African state of Gabon. I would encourage him to visit a very successful, very prosperous, very sophisticated collection of countries collectively called the Nordic region. Norway, Denmark, and Finland all have similar populations to NZ and have a dominant supersized city accounting for over 30% of the populations – the cities of Oslo, Copenhagen and Helsinki respectively!.

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THUNDERBIRDS ARE otaGO

Posted on: November 13th, 2007 | Filed in Architecture & Construction, Regional News, Renting

A real estate agent in Christchurch has bought the rights to be the first kiwi in space via private rocket. To be honest, a trip to the moon is probably high on the wish list for us all. Personally, I would be happy just to travel out far enough to float around in a weightless environment; I’m not that worried about hitting a par 3 on the Ptolemy Crater Course.
Given that this may not come to pass in our lifetimes – what could be the next best thing for astronaut-hopefuls is a spaceship lifestyle on earth in Dunedin.

Experience life like Lady Penelope, Virgil and Scott with the added bonus of being right next to the beach

This futuristic flat features an open plan orbiter with one bedroom, built in furniture, small kitchen and separate bathroom with shower and toilet.

Otago spaceship It has a large pod, which is docked onto the back of it for use as an extra lounge or office – earthlings call this a conservatory. There is also a garage for parking your space cruiser and off-space-highway room for visitors to dock their sandcrawlers. Clever co-ordinates and orbit speed means this ship catches all day sun and views of Blueskin Bay (when you’re not on the dark-side of the moon).For times when you want to get back down to earth – a quick space-walk lands you on Warrington Beach.

Please note: Aliens wanting to take up the tenancy may need a reference.

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