The Unconditional Blog

The impartial voice of the industry


Real estate online proves appealing to investors

Posted on: July 21st, 2011 | Filed in International, Technology

The business of online real estate marketing as presented in this country by and Trade Me Property is not only appealing to buyers and sellers of property (and their appointed real estate agents), it appeals globally as an investment option – one that garners high valuations.

This morning (July 20th EST) Zillow floated 20% of the shares in the company. The company was launched in 2006 and unlike other traditional real estate portals it started life as a property valuation website using publicly accessible data to place a valuation estimate on every house in America. This appealing data set generated massive consumer traffic and interest which over the years has morphed into a complete listings portal for property for sale, for rent as well as a unique mortgage marketplace. The US has a complicated middle layer for property listings unlike almost any other country in the world and as such challenges real estate websites to access the complete set of listings data.

Today Zillow is in the top 3 real estate websites in terms of website traffic. It has a valuation based on its listed shares on the NASDQ – currently at this moment of US$671m – that is based on a share price of $38.50. The shares launched at $20 hit a high of $60 and seem to be settling at this level at the close of the first day. A pretty impressive result for a company which has had around US57m invested in it through venture investment funds and has yet to turn a profit – reporting an operating loss of US$6.8m in 2010.

Zillow certainly has a long road ahead to demonstrate that its business can justify that valuation and show a return to the investors – the IPO has added close to US$80m to its bank balance to drive the business forward.

By contrast to Zillow in the US, in other major developed countries the market value of online real estate companies has been long established. The UK website of and the Australian website of have both been listed on their respective stock markets for over 7 years.

The table below shows the relative financial performance of these key sites across these key markets.

When placed against these powerhouse real estate website Zillow looks quite small in comparison especially when judged by the scale of the US market – simply based on revenue the Zillow latest full year shows just NZ$0.11 of revenue per person a staggering 100 fold less than the powerhouse of Australian site with $NZ$10.70 per person. The results for maybe be slightly inflated as they do have a couple of international businesses, however Australia represents over 90% of the revenue and more than 100% of the profit (the Italian business currently makes a loss).

So Zillow has a major upside if it can continue to grow traffic and industry advertising dollars. It is not without competitors in the form of, Yahoo Real estate, and Trulia to name but a few of what is a very cluttered / competitive marketplace. However it is very clear from this IPO for Zillow and the current financials and investor demand – online real estate certainly holds strong appeal for investors.


Shortage of listings is key to the state of the property market

The monthly sales report from the Real Estate Institute (REINZ) states clearly that “Listings tight in June housing market” – this assessment comes from “strong indications from agents in many regions that the supply of properties is really tightening“.

This perception is reality; the data in the monthly NZ Property Report underpins this with the numbers to show the decline in new listings as detailed in the chart below.

Listing numbers have been falling steadily for over a year, and matched to a slowly rising rate of sales, is beginning to show in the declining stock of homes on the market. This could potentially lead to a demand heavy market which could see price pressure in the medium term.

To better highlight the listings to sales ratios; I have developed these charts to show the picture nationally and regionally. I have assessed the property market based on the first 6 months of 2011 vs the first 6 months of 2010. Nationally this year is showing sales down 1% – however if you remove the Canterbury region the national picture shows a 4% growth in sales. Matched to this is a 14% decline in new listings (17% decline if you include Canterbury).

The chart ably demonstrates why Auckland is most definitely feeling the effect of a tighter property market – sales up 10% and listings down 13%. Wellington sales are sluggish but again listings are down 12% whilst Canterbury is experiencing the unique aspects of the earthquake of February.

Looking around the country the regions that are showing growth in sales year-on-year are grouped in the chart below. Eight of the 19 regions show year-on-year growth in sales – the West Coast of the south island topping out with a sales rise of 14%. All regions though show declines in listings.

The remaining 11 regions of the country presented in the chart below are witnessing year-on-year sales declines, some double digit declines. Equally they all (with the exception of Nelson) are seeing declining listings, largely in line or greater than the decline in sales.


Energy efficiency – something worth celebrating

Posted on: July 20th, 2011 | Filed in Buying / Selling a home, Green, Online marketing, Website searching

You cannot have ignored the extensive TV campaign for “The Energy Spot” by EECA Energywise. This government agency has shared with us some of the myriad of ways in which we as a country can do a little bit to make ourselves more energy efficient. To all save a little, so we can all save a lot.

When it comes to your home the benefits of energy efficiency run deeper than cost savings. It can go as deep as your health and well-being. It is well know and often reported that the housing stock of NZ could be improved – making our homes more comfortable, warmer in winter, cooler in summer and healthier, while using less energy and water.

This focus on the overall performance of your home is the principle behind a parallel initiative: Homestar which is a Joint Venture partnership between BRANZ and the New Zealand Green Building Council. Through an assessment process homeowners can better appreciate the differences that can be made to the performance of their home. Armed with such information appropriate decisions can be made as to improve the living environment of your home.

The Homestar initiative was launched at the end of last year and involves a free online self assessment as well as a far more comprehensive and professional certified onsite assessment. As a result of the latter certified assessment; properties can be rated on a 10 point scale – the first of these properties having been assessed, are now on the market with the assessment rating providing a real point of difference in the marketing of the property.

At we are totally committed to this initiative on behalf of the industry and also as a service we can provide to buyers, sellers and agents by profiling these properties on our website differentiated by this certified assessment. Have a look at these recent listings of properties rated by assessors.

It is important to point out that whilst the rating scale is 1 to 10 the vast majority of NZ properties are rated 2 or below, rating a 4 is a reflection of a reasonable amount of attention to efficiency. Rating a 10 is all but impossible without being able to generate your own power and recycle your water. A new house built to the current Building Act would likely score a 4.

As stated we want to support the Homestar rating process and we are putting our money right on the line. We have made a commitment to the real estate industry to say for every property listed on our site between now and the year end with a certified Homestar assessment we will provide the vendors of that property through the listing agent a marketing package worth $359 – comprising a feature listing and 2 weeks of showcase listing.

Just to be clear this is not for an online self assessment- it does require a certified assessor to visit the home to undertake the assessment. The costs for this assessment are not fixed, but indications are that it would cost around $500. So we are prepared to give back to vendors who want to demonstrate the performance of their property a large portion of their costs in the form of premium advertising their property on – a powerful means to promote their property online.




100+ property questions in an hour!

Posted on: July 15th, 2011 | Filed in Buying / Selling a home, Technology

Yesterday the challenge was offered to me by the NZ Herald – to participate in a live chat on the wide ranging subject of property.

Sixty three minutes later I had managed to answer 28 of the 114 questions that were posed by the online contributors. I hope the answers I gave were helpful, relevant and legible (I once got a spelling shield at school when I was 6, since then I have have long relied on spell-checker).

If you are interested you are most welcome to review the questions that I answered as the NZ Herald are still hosting the content of the live chat using a great software tool Cover It Live.

The experience was rewarding, but at times daunting, I was sat in front of a laptop with a steady stream of questions being posted. The challenge was which one to answer and how to provide answers that are not too long to type, yet provide some meaningful answer. I like the technology and can see the appeal. We might do one on this site or on in the future.

As I stated I only got to answer 28 of the questions that were asked – barely a quarter of those posted. I may well take a few and answer those in a future post. In the meantime I thought I would  share a small survey I have done on the topics of the questions posed, so here are the top 10 questions by topic:

1. Investment – 20 questions were asked about investment property – yield, market etc

2. Timing – is this right to buy, right time to sell

3. Apartments – this was surprising just how many people were asking about buying apartments

4. Mortgage rates – likely future trend, plus a number asking is fixed or floating best

5. General health of the property market – is it going to be good for future purchase

6. New builds – is there a shortage of new builds and what impact this may have on the supply side of the market

7. Capital Gains Tax – given the timing I thought this would be the most active topic

8. Overseas market comparisons – clearly there is a sense of concern that NZ will shadow the US and UK property markets

9. Will prices rise? – expected question but not as much as I would have thought

10. First time home buyers – looking for advice including questions on investment property rather than buying to live in

The overwhelming majority of questions seem to come from Auckland with a lot wanting to know which suburb was best to buy in! I was also pleased to get questions from the Hutt Valley and the Waikato.



Have Auckland property prices reached a new peak?

Posted on: July 12th, 2011 | Filed in Buying / Selling a home

The latest data released by QV show that property values in the Auckland central area have surpassed the peak of 2007. The NZ Herald features this as a front page headline “City house values hit new heights“.

Does this mean that property prices are now on a resurgent rise and we are heading into another property bubble?

The answer to that question is not something I am going to answer directly. I hold the view that rather than speculate it is better to inform. The key piece of information I think is important to share is comprehension of statistics.

The NZ Herald are absolutely correct in their headline – property values have hit new heights. The data of property values is what QV specialise in. They are a state owned enterprise that carry out assessments for local authorities into the value of property for rating assessment. They are currently employed to assist the new Auckland Council to provide a new rating assessment of all properties in the region. This will be complete in September.

QV asses the value of a property based on recent sales in the vicinity of a property. That sales data comes from the register of title changes which come from LINZ. Sales are registered at LINZ by conveyancing solicitors after settlement of sale. It is quite likely that this process can reflect sales that were “transacted” some 4 to 6 months earlier. QV use a proprietary algorithm to compute valuations, they do not undertake physical inspections on properties.

The current national picture of property values provided by QV show property values 5.2% below the peak.

In the case of the wider Auckland region the data show property values are still around 2% below the peak of 2007.

These reports by QV on property values certainly provide an excellent guide to the trends in the market. QV in their summary do state that “QV’s Residential Price Index is calculated using sales data from the three months leading up to month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper and lower price brackets.”

QV are correct in their comment regarding fluctuations due to sales mix; that is why the REINZ Stratified Price Index was created in conjunction with the Reserve Bank. This price index uses the most recent sales price data collated from unconditional sales reported by licensed real estate agents from across the country in the recent month (in this case May).

The Stratified price index uses statistical modeling of proven and respected form as supported by the Reserve Bank to ensure that the fluctuations in line with the mix of properties selling in the upper and lower price brackets are removed to provide a truer picture of property selling prices.

The respective charts for the Stratified price index shows a similar trend as QV. The current stratified price nationally is 5.8% below the peak.

Viewing the stratified price across the Auckland region though shows a very different view to QV.

Whilst the stratified price edged upward over the first months of 2011 towards that 2007 peak, the May figure brought it down to 4.3% below the peak. The stratified price is based on actual unconditional sales in May, whereas QV is based on registered sales post settlement from April / May / June which potentially cover unconditional sales from Feb through to May. This may explain and assist in seeing that the future trend of property prices (particularly in Auckland) may not be about to rocket away.


No mysterious spike in mortgagee sales

Posted on: July 5th, 2011 | Filed in Featured, Media commmentary

Mortgagee sales are still a part of the NZ property market. Currently there are 333 properties being marketed in NZ as mortgagee sales. These properties are being marketed by real estate agents on behalf of the mortgagor (in most cases the bank that loaded the money on the house in the first place).

This total though needs to be placed in perspective. There are today 49,782 properties for sale being marketed by real estate agents (excluding sections) across NZ; that means that a mortgagee listed properties represents just 1 in every 150 properties on the market.

The level of mortgagee sales as measured by the number of mortgagee listings on has been declining in the long term trend since the peak in early 2009. There has been some small ups and downs, however the chart below certainly highlights the trend over the past 4 years since the data has been collected.

In respect of this trend this chart which tracks year-on-year comparison of listings on a 3 month moving average basis shows when the emergence of mortgagee sales occurred; when the fall off from the peak occurred; and then just how steady this category has become over the past 6 to 9 months with a steady flow of new mortgagee listings coming onto the market matched to ones that have been sold.

It should be noted that the listings data only relates to properties for sale that are marketed as mortgagee sales and excludes sections. At this time there are some 113 sections which are mortgage sales.

This separation of mortgagee property from mortgagee sections in the presented data could be the reason behind the confusion of data presented in the Sunday paper article titled “Mystery spike in mortgagee sales“.

The article cited the number of mortgagee sales listed on as of last week at 435. This total would be for both properties and sections. This was then compared to a figure from October of last year of 321 listings; this lead to a supposition that listings were up 37%. (Our office was not unfortunately contacted to share the mortgagee data we track and thereby a misinterpretation occurred).

I believe that the article writer or researcher may have reviewed the article written on this blog back in October last year which detailed the then latest data of 321 listings for mortgagee properties on the market. The comparison is that the number of mortgagee properties on the market today is very nearly identical to that number on the market last October.

The data shows that there in no mysterious spike in mortgagee properties; they are still a part of the property market and from historical review tend to be a lagging indicator of the economic recessionary times that catch out home owners as unemployment and financial hardship hits home.


NZ Property Report – June 2011

Posted on: July 1st, 2011 | Filed in Featured, NZ Property Report

The June 2011 NZ Property Report published by provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of May. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 95% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – June 2011 is published below and is available for download (1.0MB) and distribution.

Summary of the market – June 2011

What began last month as an early trend towards a sellers market has taken on a faster pace through June. Nationally whilst the inventory levels hover just above the long-term average of 41 weeks, key regions of the country are now firmly set in a sellers market. This situation has the potential to be exacerbated by the traditional reluctance of property owners to list their homes through the winter period. During the winter, sales per month tend to drop by around 5% as against a normal month, however new listings tend to fall more significantly by up to 15% as compared to a normal month.

Heading into the winter period with a growing number of regions seeing inventory levels below long term average could well result in elevated buyer demand with a potential to see property price appreciation. Those regions are Auckland, Queenstown, Bay of Plenty, Waikato and Otago.

Countering this potential for price appreciation is the fact that in June the asking price expectation of those new listings coming onto the market at $415,053 showed no change as compared to May and in fact represented a 2% fall in price as compared to the recent 3-month period.

Asking Price

The truncated mean asking price for all new listings in June rose very slightly from $414,308 in May to $415,053. On a seasonally adjusted basis the asking price rose just 0.8% in the month indicating a degree of caution amongst sellers.

The overall trend of the past 2 years continues to show a slow but steady strength in asking price expectation.

New Listings

The level of new listings coming onto the market in June fell again to 9,111. This represented a 18% year on year decline but a 2% seasonally adjusted rise from May.

On a 12 month moving basis the number of new listings in the past year totals 125,848 as compared 145,920 for the same period a year ago – a fall of 14%.


The level of unsold houses on the market at the end of June continued to fall from prior months. June reported 47,738 down from 48,352 in May and 50,398 in April.

The recent relative strength of sales as seen in March through to May has now stared to see a clearing of what has been a high level of unsold houses on the market over the past 18 months. Heading into Winter, a time of traditionally weaker listing will likely see this inventory level fall further in coming months.

Regional Summary – Asking price expectations

The asking price, having fallen in May barely changed in June. Across the regions there is certainly some variances. A total of just 6 regions saw an increase in asking price expectations as compared to 13 showing falls.

The scale of some of these movements was significant, even outside of the smaller regions, which tend to exhibit large variances. Most noticeable were falls of greater than 5% in Wellington, the Hawkes Bay, Taranaki and Otago. The largest asking price rises of greater than 5% were seen in the Bay of Plenty and Coromandel region, the latter still witnessing high inventory and as such is very much stuck in a buyers market. The biggest movement in asking price this month was seen in Southland with a 6.8% increase as compared to the recent 3-month average.

Regional Summary – Listings

The regional perspective of new listing is very clear this month with one solitary region showing a rise in new listings comparing June 2011 with a year earlier. The Central North Island as well as seeing a rise in new listings is experiencing a buyers market with inventory of unsold properties exceeding long term average.

The majority of regions (13 out of 19) saw double-digit falls of new listings on a year-on-year basis with the biggest falls seen in the West Coast, Gisborne, Bay of Plenty, Marlborough, Canterbury and Wiararapa.

Two regions in June reported the lowest levels of listings going back to Jan 2007, they were Northland with 352 listings and Wiararapa with 117 listings.

Regional Summary – Inventory

The levels of inventory of unsold homes on the market fell further in June. In the space of just 3 months the levels have fallen from significant highs to be very close to long term average for many regions of the country.

For 2 years the predominant look of the regional inventory map has signaled a buyers market. In June there were 7 regions on or below their long-term average for inventory of properties on the market.

The most significant regions experiencing this shift to a seller’s market are Auckland and Queenstown; now joined by the Bay of Plenty, the Waikato and Otago. Not far behind the regions of Nelson, Wellington, Canterbury and the West Coast all of which are edging to a turning point in the market with more balance between buyers and sellers.

That still leaves 9 regions, all of which are provincial NZ firmly in a buyers market with existing inventory well above long term average.


The level of new listings of lifestyle property coming onto the market in June fell by 4% on a seasonally adjusted basis from May. A total of just 829 new properties were listed with a truncated mean asking price of $554,864. The asking price was down 1% as compared to the recent 3-month average, and down 3% as compared to prior year.

On a rolling 12-month average basis new listings are down 10.5% with 11,346 listed in the past 12 months compared to 12,679 last year.


Listings of apartments showed a 21% increase on a seasonally adjusted basis as compared to May with 439 new apartments coming onto the market. The truncated mean asking price for these new listings was $397,747, which was up 4.0% on the recent 3-month average, and up 8.3% as compared to June 2010.

In the Auckland apartment market, which represents over 60% of the market there were 274 new listings with an asking price of $383,980. The new listings shows a rise of 17% on a seasonally adjusted basis, and a 3% rise when judged on a year-on-year basis.

Property Price Index

Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below: data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the website. The website currently has over 95% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.

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


Truncated mean

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

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


With the largest database of properties for sale in NZ, is uniquely placed to immediately identify any changes in the marketplace. The NZ Property Report is compiled from new listings coming onto the market from the more than 1,020 licensed real estate offices across NZ, representing more than 95% of all offices.

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

In analysing the details of the 9,111 new listings in the month of June a total of 166 listings have been excluded due to anomalies. The land area of the property defines the categorisation of Lifestyle property. The criterion is a property having in excess of 0.3 hectares and being situated outside metropolitan areas.

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

The business operates a portfolio of websites all focused to specialist sectors of the real estate market: is the heart of the business and is focused to the residential property market. It features the most comprehensive selection of property for sale and rent across NZ. The website attracts a significant monthly audience of over 400,000 unique browsers, with over 110,000 of those visiting from countries outside of NZ.

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

Prime Commercial is a specialist website presenting the most comprehensive selection of commercial property for purchase or lease on the market across NZ. At this time it features over 27,000 listings for all types of properties – retail, commercial, industrial and investment properties.

Prime Business is a specialist website presenting the most comprehensive selection of businesses for sale on the market across NZ. At this time it features over 4,300 listings for all types of businesses – retail, tourism, wholesale as well as franchise opportunities.

Zoodle is a specialist property information website providing very detailed data on all residential properties in NZ. The database comprises over 1.6m properties with detailed specifications, map and local amenities. The site provides online reports for free and for purchase covering valuation and legal information to greatly assist the needs of property buyers and sellers.

The web business of site is the most comprehensive real estate web operation in NZ, currently hosting over 120,000 listings, covering this portfolio of residential property for sale and rent, commercial property for sale and lease, rural properties and farms, as well as businesses for sale. With a subscriber base of over 1,020 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.

The full NZ Property Report for June 2011 can be downloaded here (1.0MB pdf document). Additionally the raw data is accessible here as an Excel spreadsheet enabling anyone to analyse the raw data and establish any trends or observations.

Usage rights are governed under attribution to the source of the data being The next NZ Property Report for July 2011 will be published on this website on Monday 1st August 2011 at 10am.


Australian real estate industry lines up to challenge web leader

Posted on: June 27th, 2011 | Filed in Featured, International, Real Estate Industry, Real Estate Industry News

NZ’ers are always interested to see what is going on in Australia and when it comes to online real estate we here at are always interested to see what is happening on the other side of the ditch. At the moment it seems quite a lot judging by the front page headline from the Australian Financial Review.

Real Estate Agents ready to “revolt” reads the headline. It appears that after more than a decade of benefiting from the online transition of property buyers from print to the web,  with the consequential financial savings; the industry is now revolting from what they see as exorbitant charges from the online market leader (just for clarity there is no connection between our site and the Australian site of the same domain name). (REA Group) has been a stellar success of web marketing, founded before the dotcom crash of 2000 it has grown from nothing to now be valued at in excess of A$1.6bn as an ASX listed company (the majority shareholder is News Corporation). The site holds the lion’s share of web visitors and around 95% of all listings. The chart below tracks the leadership in web traffic by to its nearest competitor (Fairfax owned

With this powerful position of dominance of the collective eyeballs of property buyers and the dominance of content, the company has over the past decade grown revenue from a couple of million dollars to well over A$160m. On average each real estate office in Australia pays over A$1,000 a month and this scale of fee combined with the regularity with which they increase this fee now has the industry up in arms in a very public manner. The industry as reported in the article is looking to band together under what they are calling “Project Rebellion” to power an alternative website with which they hope to secure a competitive threat to submit into reducing fees or potentially remove it from the market.

Could this happen? – the rich and comprehensive content of real estate listing is what property buyers seek, in theory they will go to the site that has the most content. That content is totally in the control of the agents, so in theory this is possible. However consumers are creatures of habit and have no idea what constitutes comprehensive content. A new website would have to spend a lot of money promoting itself to create awareness to say it was the “new home” of property listings online. At the same time the agents would all in unison have to stop using, something many in the industry might be wary of doing as it is a very powerful and effective advertising medium for their clients listings with over 7 million monthly unique visitors.

The whole challenging conundrum is very well detailed in an article by Simon Baker in the Property Observer – his summation is that there is very little chance of this initiative having any legs. As a point of note Simon Baker is the former CEO of and still remains a shareholder. As he states in his article, the publication of this story in the Fin Review last week knocked 5% off the market value of REA amounting to a paper depreciation of the company’s value of some A$80m – that personally impacts Simon.

New Zealand

What implications might this initiative in Australia have for the NZ industry?

In NZ there are really two key online real estate websites. Trade me Property has the highest level of website visitors. In the past month it received over 1.4 million unique browsers as measured by Nielsen online, by comparison received just over 400,000 unique browsers (as a point of reference there were just 5,766 properties sold in the month, which just goes to show the casual browsing appeal of property to kiwis). In terms of content holds the most comprehensive selection of listings from licensed agents – around 95% of all such listings. Trade me property has more listings in total on their site, however their licensed real estate listings are supplemented by a significant number of private sale listings.

Trade me Property is owned by Fairfax media whereas is owned by two shareholders – the Real Estate Institute holds 50% and the balance is held by 6 of the larger real estate companies (Harcourts, Harveys, Ray White, Bayleys, Barfoot & Thompson and LJ Hooker).

In NZ there is a disparity of what each website charges for its services to its agent. has a two tier subscription based on office size. Large offices (more than 6 active salespeople) are charged $300 per month with small offices $225 per month. The charges for Trade me are higher at $799 per month. Certainly the real estate companies in NZ do not pay as much as their counterparts in Australia, however when seen in perspective of the relevance of online marketing and how much it has made print media so redundant for property marketing, it is somewhat surprising that this reaction is happening at all.


Christchurch attracts greater interest as earthquake affected search new homes

Posted on: June 27th, 2011 | Filed in Website searching

The announcement by the government of the package of support to provide a purchase for up to 5,000 homeowners effected by the February earthquake has certainly generated more interest in property across the region.

Following the announcement on Thursday the levels of visitor sessions on for property in the Canterbury region shot up by more than a third. The chart below track the past 4 days since the announcement.

The most severely affected areas around Bexley, Avonside, Avondale, part of Brooklands, Burwood/Horseshoe Lake, part of New Brighton and Dallington are still showing property listed for sale as shown on the map view of listings from the website. This area comprises 130 properties on the market at this time, some of which will be outside the red zone.

In total there are some 2,142 properties on the market in Christchurch city at this time – a broad selection for those effected by the earthquake, adding to this total some 700 new listings have been brought to the market over the month of June to date. Full details of these will be in the June NZ Property Report published on Friday 1st June.


Are property buyers really in the box seat?

Posted on: June 23rd, 2011 | Filed in Buying / Selling a home, Featured

“There has never been a better time to buy a house” – this was the first line of the Sunday newspaper article this past weekend. A big call some may say, especially when the property market has seen a very sober and lacklustre market over the past 3 years.

It is worth pausing for a moment to reflect on what circumstances arise to cause the property market to be either a great time to buy, or a great time to sell.

These circumstances are usually in opposing territory. However there are always exceptions and most recently in that heady period around 2004 when the pace of the market favoured both buyers and sellers with prices and volumes rising steadily and at such a pace that you almost “had” to buy and sell – or you feared being left behind in the market.

Great time to buy!

Great times to buy are generally when the cost of borrowing (interest rates) are low; when the availability of property on the market is high, and when there are not many other competing buyers in the market.

As to whether falling prices are a great incentive to buy is debatable as a cautious buyer will usually hold off  in these situations to see if prices may in fact falling further.

Great time to sell!

Great times to sell are generally when the cost of borrowing is cheap thereby encouraging a lot of buyers to come into the market. Ideally this is also combined with a shortage of properties on the market therefore forcing buyers to compete with each other to buy your property.

As to price, it is likely sellers are not that concerned. All they want is to sell. The price they sell at will be as the market dictates, which will allow them to move on and buy another property as appropriate.


The newspaper article went on substantiates the claim of it being a great time to buy, by stating that interest rates are currently at the lowest levels for decades. That is certainly true and with the vast majority of property purchased with a mortgage the cost of borrowing is a key driver of the market. The chart below (courtesy of the Reserve Bank) tracks mortgage rates over the past 20 years and clearly shows how low today’s rates are on a historical comparison – especially when you see the peak at over 15% in 1991.

Reserve Bank of New Zealand - Floating & 2yr fixed rates for new borrowers

The article stated that in addition to low mortgage rates the other key driver of a “great time to buy” was the fact that “prices across the country plunging in the past month”. I would challenge this assertion from the standpoint as made earlier that falling prices can in certain circumstances impede buyer motivation. It is also so important to look at house prices not on a one month basis but on a trend perspective.

The recent blog post entitled “NZ property prices continue to ease” highlighted the Stratified mean sales price across the country. This showed no sign whatsoever of “plunging prices”. Property sales price are in all cases below the peak of the property market back in 2007 (with the sole exception of Wellington which has managed to set a peak back in late 2009). Prices would be better described as stable or lacklustre rather than plunging.

One fact the newspaper article omitted completely was the a key driver of the property market – the inventory of unsold homes on the market. As stated earlier this statistic, far more than sale price is likely to impact the state of the market as either a buyers or a sellers market. publishes its monthly NZ Property Report which tracks this inventory measured as the number of equivalent weeks of sales of unsold properties on the market. In the May report published on the 1st June as well as the regional Property Pulse regional factsheets the data showed that in the Auckland market and now emerging in the Queenstown market the power is moving from buyers to sellers. A lack of new listings and a rise in sales volumes which is helping to clear what has been high inventory is leading the Auckland market to be in a deficit of properties on the market. If as a consequence of these low interest rates, buyers are more active in the Auckland market, then there will be a need for more listings to come onto the market. This then directly favours sellers. Potentially in this seller’s market a consequence of the lack of listings may lead to property appreciation due to more demand than supply.

Outside of these major markets of Auckland, Queenstown and possibly Wellington the rest of the country is still very much in a situation of high inventory of unsold properties. This means that if there are buyers eager to take advantage of low interest rates then in these more provincial areas they will have ample opportunity to pick and choose amongst the properties on the market and allow them to drive a good bargain – maybe these are the areas of the country where buyers may well be “in the box seat”!

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