The Unconditional Blog

The impartial voice of the industry


Are “Boom Times” back for real estate?

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

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

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

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

The opening paragraph of the report states:

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

Let’s look at the facts behind these statements:

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

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

NZ Property sales matched to dwelling numbers to Sep 2009 REINZ

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

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

NZ Property Report Oct 2009 Inventory levels

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

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


The issue with property pricing

Posted on: November 9th, 2009 | Filed in Agent Tips, Money Matters

istock_000005764971xsmallWhilst the last 2 years has been heavily focused on the issue of property prices from the perspective of valuations – have they peaked?…. will they fall?….. will they collapse? or are they rising??

The current trend seems to be clear now with both the recent REINZ and QV stats showing strengthening prices.

The real issue facing the real estate industry is how to appropriately price a house when listing it on the market. If you wanted to sell a 4 year old low mileage European car or a second hand washing machine, all you need to do is let your mouse do the researching and see what similar age / condition items are selling for. Not so when it comes to a house.

Houses are not commodity items that are replicable en-masse or even frequently transacted, as the saying goes, every house is unique and every house has a value to someone – more often than not far in excess of what someone else might pay.

With this as a backdrop you can see the challenge this industry faces in judging an appropriate price to market a property. Such difficulty has in some occurrences lead to what I discovered the other day is termed ‘bait pricing’. This system which is well documented by Carl Slade on his Timaru Homes blog is clearly not to be condoned by anyone in the industry as it is clearly misleading or deceptive.

It would have to be the biggest source of emails received by our office from the public using the website and wondering firstly why every property cannot be listed with an asking price and secondly why ‘we’ seem to be deceptive in featuring properties in price range searches where clearly they are not!

The first of these issues is something that I cannot speak for on behalf of the industry. Unlike with consumer goods a recommended retail price is what you pay, but when it comes to property the price paid is always the result of the agreement of a willing buyer and a willing seller; that final agreed price may or may not bear any relevance to the advertised price.

So turning to the second issue of searching by price. We receive data concerning a property listing from individual offices every day – often up to 1,000 listings per day. We cannot and should not alter the data we are given – we do not know anything about the property in question nor do we own that data in terms of accuracy or completeness. This does not imply that we do not take seriously our role to ensure accuracy and completeness, it just recognises how we operate.

When it comes to pricing a listing we insist that each property has a display price or if the agent does not want to display a price then we must have a price range to power the search process of the website. If we receive neither we reject the listing.

The major issue therefore comes down to the appropriateness of a price range for a property. The narrower the range the better it will be for the public searching for property. Whilst I can hear the views of some in this industry who would say the greater the potential audience will be. To this I would say – let the public decide!

The majority of users of this website are smart enough to spend sufficient time to widen their price range to ensure they adequately research the market of potential property. It is very unlikely that a keen buyer will start with a very narrow price range.

Out of curiosity I did some analysis of the residential listings on our website to see how they were priced. The following charts detail these findings:

Residential listings on as at Nov 2009 - 74,000 listings

Of the 74,000 residential listings on the site three quarters are marketed with a fixed price. The balance predominantly are ‘Negotiation’ or ‘Offers’ – just 5% are made up of Auctions and Tenders.

Breaking down those listings which are not displayed with a price, shows that across the range, the majority of listings for residential property on the website fall into a range whereby the maximum price is within 25% of the minimum. That is to say that the range could be from say $400,000 to $500,000 or from $250,000 to $310,000.

Price range on residential listings - Nov 2009

However at the lower end of the pricing spectrum with properties with a minimum price below $250,000; half of all of these properties are listed  with a range of between 25% and 50% – so a range of say from $180,000 to $270,000.

Despite these ranges being the majority; there is no denying the fact that there are still 17% of all non-priced listings (2,100+) that have a maximum price in excess of 50% of the minimum – with the potential of say $420,000 to $630,000 at the very bottom of this range with some as wide as $450,000 to $700,000.


NZ Ultramarathon run for charity

Posted on: November 9th, 2009 | Filed in The lighter side

lisa-tamati-nz-run-2009Just imagine getting up before 5am every morning for 33 days and running for an average of 60+ kms per day!

This is the challenge that Lisa Tamati has set herself as she takes on a formidable challenge of running from Bluff to Cape Reinga in 33 days covering 2,200 kms. In the course of this unbelievable run Lisa is raising money for charity and proving to anyone that such a challenge can be achieved – my admiration goes out to her, especially as I find a half marathon of just 21 kms a fair enough challenge once a year!

This challenge is gaining awareness and momentum as she heads up the country – currently she is approaching Christchurch and more and more people are coming out to greet her and provide her with much needed motivation and moral support. Her daily blog provides a great insight into the mental challenge that such a run poses and how to muster the stamina and personal motivation to takes those millions of steps to the Cape.

Lisa outside the First National office in AshburtonI am also impressed by the support that the real estate industry has provided her so far – the team at First National in Ashburton rallied around and not only raised $750 but also gave her a great Ashburton welcome.

To keep up to date with Lisa’s progress you can follow her on her progress map on her website – and don’t forget to give generously by donating online to support her and the charities she is supporting – CanTeen & Cure Kids.


Principles of reciprocity in social media

Posted on: November 6th, 2009 | Filed in Agent Tips, Online marketing

Woman pointingI have been writing this Unconditional blog now for exactly 2 years – I remember a sense of excitement, fear and opportunity in those first few weeks – what to write and then of course would anyone read it?

Two years later I am still writing and still enjoying writing the posts I write and the conversations that commence from a blog post. The content of this blog now comprises 303 individual posts with 2,203 comments posted by contributors. The blog is read by an average of around 700 unique visitors per day. I certainly hope the content is interesting and valuable.

At the outset, one of the objectives I wanted to achieve with this blog was the encouragement of others in this industry to try this new social media and hopefully adopt the opportunity this new media of communication brings to in some way open up and create a greater sense of transparency in this industry.

The word I have often used in the presentations I regularly undertake around the country to groups of real estate professionals is “reciprocity” – the sense of opening up and sharing knowledge. In so doing gaining respect for being open and through that building reputation and in the long term valuable business relationships. I am pleased that to some in this industry those words in the presentations have rung true as they have started up their own blogs many of which are hosted on the Voices platform and now number over 100 active blogs.

In describing the value of the time spent blogging (as I see it more as having a conversation) I have used many descriptors, however today I came across a great one whilst reading the latest book by Chris Anderson (the author of “The Long Tail“) – his new book is simply called Free. In it he talks about the new economies which the web has created and especially the economies of attention and reputation which are key motivators of social media. He very simply, yet so effectively describes the value of blogging and the link economy:

Today when you link to someone on your blog, you are effectively granting them some of your own reputation. In a sense, you are saying to your own audience: “Leave me. Go to this other place. I think you’ll like it, and if you do, perhaps you’ll think more of me for having recommended it. And if you think more of me, perhaps you’ll come back to my site more often.


Google further enhances property mapping search

Posted on: November 5th, 2009 | Filed in Website searching

It was 4 months ago that Google offered real estate search within their excellent mapping platform. Last week began what will likely become a steady and progressive expansion of the exposure of this service within more general Google searches – this is certainly going to be a beneficial move for the consumer.

When initially released, to be able to search for property (sale or rent) on a Google map required a number of steps and a fair amount of investigative ability. It did almost seem like Google had in some way hidden this service away from the mass of the market. Were they doing a cautious test or were they apprehensive as to the reaction by the industry??

It was as a function of this limited visibility that the re-direct traffic gained for from this service was tiny in comparison to the thousands of visitors everyday who arrive at from a Google search. Now this latest change, very ably detailed in this post from the Google maps product manager Andrew Foster will likely see a greater referral traffic from Google maps.

Google Maps real estate search - Sumner, Christchurch

On every Google maps page there is an “More” box at the top right section. Within this is the options for adding to Google maps search results content such as photos, video, wikipedia entries, webcams and now real estate – tick the box and the map now populates with the latest listings of property for sale or rent. feeds a comprehensive extract from our database every day to Google so with over 112,000 listing you can be sure that the presentation on these maps is the most comprehensive representation of whats truly on the market. is the only portal confident to feed content to Google – Trade me property chooses not to share this great information.

As an industry owned website we have a focus to provide our customers with the best marketing of their listings across the web as well as to provide the property searching public with the best web experience – sharing content with Google is the best way to meet both of these objective perfectly.

View Larger Map


NZ Property Report – October 2009

Posted on: November 1st, 2009 | Filed in NZ Property Report

Click here to download the full report (1.2MB pdf)The month of October tends to be one of the largest months for new listings. In October 2007 16,751 new listings came onto the market and a year ago as the market was reeling under the economic gloom 14,462 new listings came onto the market. These comparable figures give a perspective to the October 09 of 13,550 – somewhat subdued seems to summarise this market, a sentiment that has been in place for quite a few months with shortages of listings in some regions.

The impact of subdued levels of new listings matched to recent sales which whilst significantly up on prior year still are well below long term averages means inventory levels are not building with the majority of regions edging into a sellers market.

For those sellers venturing to bring their properties onto the market the expectation of asking price has seen virtually no movement from last month which did experience a significant rise.

Asking Price

NZ Property Report October 2009 Asking price expectationThe vendor’s expectation of asking price for properties coming onto the market in October remained stable.

The truncated mean price for the 13,550 listings added in the month was $418,759. This represents a 3.5% rise in asking price when compared to the moving average of the past 3 months (Jul/Aug/Sep).

The asking price of new listings in October last year was $406,271 representing a 3.0% year on year increase.

New Listings

NZ Property Report October 2009 - new listingsThe number of new listings coming onto the market rose to 13,550, from the September total of 12,674.

Despite the uplift in listings during October the level of new listings over the past 12 months continues to show a 21% fall with 133,956 new listings in the recent 12 months as compared to 170,428 in the prior 12 months spanning 2007/8.


NZ Property Report October 2009 - inventoryThe overall level of available inventory as measured by equivalent weeks of sales grew slightly again in October – the 4th consecutive month of rise from 25.4 weeks in July to the current level of 26.2 weeks.

The year on year inventory decline though better reflects the change in the market over the past 12 months. A year ago the equivalent inventory still exceeded 46 weeks – equating to over 10 months of inventory.

Regional Summary – Asking price expectation

NZ Property Report October 2009 - Regional asking price expectationWith a national asking price rise of 3.5% as compared to the prior 3 month average, the regional variances are quite significant. Of the 19 regions 7 showed a price decline, the largest of which was Gisborne, the remainder were significantly smaller falls.

The dominant rise and the leverage factor for the rise nationally is the 5.3% increase in Auckland. This rise comes on the back of a 5.9% increase in September. Auckland now with a truncated mean asking price of $535,313 is only slightly behind the peak of asking price of $547,163 set back in October 2007.

The two other major centers of Wellington and Canterbury both showed increases of around 4%.

Regional Summary – listings

NZ Property Report October 2009 - Regional new listingsThe overall perspective of the regions continues to point to a sellers market with only 2 regions showing a significant rise in listings – these being Coromandel and Northland. The Northland and Coromandel region’s increases are more than likely a function of traditional seasonal listings of holiday home properties.

Regions on the increase are also Otago and Taranaki with both seeing over 10% increase as compared to October last year. In the case of Otago the number of listings (581) grew 30% over the prior month.

There were 5 regions (Central North Island, Manawatu, Wairarapa, Marlborough and Southland) that saw new listing at levels significantly down on last year.

Regional Summary – inventory

NZ Property Report October 2009 - Regional inventoryThe balance of the market between sellers and buyers is represented in the attached chart with the trend to blue highlighting a relative shortage of listings with the trend to green favouring buyers with a surplus of listings. The assessment is made in judging the current month with the 2 year average inventory level.

The main 3 centers of Auckland, Wellington and Canterbury (Christchurch) continue to experience inventory levels relatively low to long term average, to these can be added the regions of Central North Island and the Hawkes Bay.

At the other end of the market the regions seeing more of a buyers market are Northland, Southland, the West Coast, Wairarapa and Gisborne.

Lifestyle Property

NZ Property Report October 2009 - Lifestyle property listingsThe level of new listings of lifestyle properties remained close to the number for September, somewhat less than would have been expected for the time of year. A total of 1,160 new listings came onto the market in October.

Key regions showing increases were Auckland – 297, up 27% on prior year; Bay of Plenty – 120, up 67% on prior year; Hawkes Bay – 49, up 63% on prior year and the Coromandel – 22, up 22% on prior year.

The truncated mean price for the new listings was $603,271 representing a 7% increase on the 3 month average.


NZ Property Report October 2009 - Apartment listingsA total of 651 new apartment listings came onto the market in October representing a 10% increase over the prior year. Again Auckland represents two thirds of all these listings with 425 new listings, this represented a 23% increase in the Auckland market as compared to the prior year.

The truncated mean asking price for the new apartment listings in the month was $376,487 representing a return to the levels of the earlier months of the year after a rise last month. As compared to the 3 month average the October price represented a 2% fall.

The full report can be downloaded here (1.1MB 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 by attribution to the source of the data being The next NZ Property Report for November 2009 will be published on this blog on Tuesday 1st December at 10am.


Perfect marketing for halloween!

Posted on: October 31st, 2009 | Filed in Online marketing, The lighter side

It’s the 31st October today and this presents marketeers with a twice a year opportunity (well April the 1st would be the other day!) – theme an advert to suit the day!

This is exactly what this smart agent Andrea Kent has done with her client’s house – as she calls it a “quirky home” – definitely one of those great real estate euphemisms for “this house needs some significant work.

The advert in today’s paper and on the web certainly creates standout – that is what marketing should do, so my congrats to Andrea – I hope you find an enthusiastic buyer who is prepared to step into the shoes of its prior owner who as you appropriately describe “have returned to Transylvania”!


Larger than your average family home!

Posted on: October 30th, 2009 | Filed in International, The lighter side

The US real estate website Zillow has just highlighted what they believe is the largest house in the US. At 43,031 square feet (3,997 square metres) – that means this house has the floor area of just that bit less than an acre!

US largest home - NY state

As Zillow reports on their blog the property which has a very nice waterfront vista along from the famed “The Hamptons” took 5 years to build and is built on a section size of 63 acres. The property comprises officially 21 bedroom and 18 bathrooms. The unique Zillow Zestimate places an approximate value on this property of US$202,864,000 – roughly NZ$262 million!

The property makes a very impressive image as seen on Google satellite imagery as seen below

View Larger Map

In NZ we certainly do not have anything quite as grand, extensive or expensive!

The most expensive and most impressive property for sale as listed on the website at this time is this grand property on Waiheke island being marketed by Michael Boulgaris.

This 12,000 square foot property (barely a quarter of the size of its US sister) is set in 88 acres of land on Waiheke island. It is a very impressive property boasting 8 bedrooms and 6 bathrooms and three open fires, together with a private wharf, tennis court and boat shed.

Whilst Waiheke island may not be quite “The Hamptons” the NZ$33 million price tag seems pretty good value for an undeniably impressive lifestyle!


Property searching online vs offline

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

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

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

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

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

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

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

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

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


Could cheap money be driving the NZ property market?

Posted on: October 27th, 2009 | Filed in International, Money Matters

istock_000004562929xsmallThis is potentially the most staggering news story I have read in a long time.

The London Evening Standard last week reported that banks are ‘desperately’ seeking people to lend to so as to meet the demands set on them by the British Government who want to see a healthy and active banking industry that is stimulating the economy. The problem is that it appears that banks are not surprisingly kind of cautious as to who to lend to.

So when faced with this dilemma – we need to lend – but we can’t lend to those who most need it – those that are a poor credit rating – who do we lend to?? – they have decided that the very people who naturally have very good credit rating would make excellent clients – those with huge salaries in senior jobs.

It turns out that among the top CEO’s of London City companies most have been approached to borrow large sums of money at very attractive rates of interest in some cases as low as 1.5%.

Of course these affluent individuals have the skills and capability to find many a home for such money which can earn easily a few multiples of the borrowing costs. This virtuous circle of course makes everyone happy:

  • Banks are lending
  • Banks are lending to low risk clients
  • The UK Government sees their role being exercised through stimulated liquidity
  • Money is flowing through the economy and driving up prices of shares and property – ??

It is this last comment that is of interest for in the Evening Standard article it actually cites the example of “carry trades” of currency investing whereby borrowed money in low interest countries (eg UK) can be invested in higher interest countries – example being New Zealand!

Could this flow of money from UK banks to affluent Brits be flowing into NZ property? – it would seem somewhat unlikely given the currency exchange between the UK and NZ of late. The long term exchange rate of around 0.35 has risen in recent months to over 0.45 meaning that our median priced house which a year ago at $430,000 would have cost £119,000 would today cost £153,000, whilst in NZ the median price has remained fairly static.

However despite this UK pound appreciation of our property prices; in just the last week we have witnessed a steady rise in the number of UK visitors to as a % of all traffic. The traffic has grown by over 12% – ahead of any other country going from 3.9% to 4.4% of all visitors to the site.

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