The Unconditional Blog

The impartial voice of the industry

 
0

The smart grid – the next extension of the information super highway

Posted on: October 25th, 2009 | Filed in Green, Technology

Smart Grid 101 - Business WeekFifty five years ago the then head of the US Atomic Energy Commission foretold of a time in the future when as he put it “our children would enjoy in their homes electrical energy too cheap to meter”.

We are the children he foresaw, however that world has yet to eventuate. His prediction interestingly was not of future of nuclear power, despite that being the flavour of the day, his prediction was of hydrogen fusion, something that is only now emerging.

Although we are not clearly approaching a time when “power will be too cheap to meter” we are approaching a time when we will be able to closely monitor not only how we use power but more and more how we produce power. The smart grid is emerging as a real future for houses across the world which will provide us with an analysis of our usage by time and type of consumption allowing for decision making which could tie into a greater range of peak and off peak charging by power generators.

Individual solar panels on house roofs which are currently dropping in price (almost in line with the classic “Moore’s Law” which accurately predicted that silicon chip technology would see a doubling of transistors every 18 months matched to a halving of cost) could reshape the balance between generation and consumption aided by wireless accessed smart meters providing online account details.

This scenario is well presented in a recent Business Week article and podcast which examines this phenomena. As the article states it could have an empowering influence for the consumer to better be able to manage power usage in the future, allowing us to make better decisions as to what type of devises to buy and use and also when to use them – aided with enhancements in battery technology which would allow us to even collect and re-sell power at optimal time when demand is high and thereby take advantage of spot pricing.

Not surprising in all of this technological development is the  appearance of Google. Google happens to be one of the major power users of our modern time, with an unconfirmed; but much estimated inventory of web servers and database servers running in the millions of units. The fact is that in our online world power usage at data centres is often far in excess of the cost of the hardware.

Google has long held the principle of organising the world’s collective knowledge and making it available – power usage, consumption and generation is just such information and therefore it is not then surprising that Google this month announced a partnership with a smart meter company. In addition Google already invests in solar farms and is generating most of its own energy at it’s Mountain View campus in California. These are the early signs of where Google could be looking to extend its offering from the web (the utilities of the future – which might just be “too cheap to meter”) to another of today’s utilities.

1

Searching for property online growing at the fastest rate since 2007

Posted on: October 22nd, 2009 | Filed in Uncategorized, Website searching

In just the last four weeks there have been more visitor sessions to the major real estate websites in NZ than there are in inhabitants of our country – 4.41 million visitor sessions compared to 4.33 million people.

This total activity is measured across the major 8 websites as reported by Nielsen Online and measured as purely the number of NZ visitors.

The rate of growth over this year-to-date as can be seen from the graph below is the sharpest rise since early 2007 when the property market was in full swing with sales per month running at around an average of 7,800. Today that average is just 5,800 per month some 25% lower; yet interest in viewing property online is actually some 50% higher than that same period in 2007.

NZ real estate weekly traffic 2005 - 2009

The scale of online property searching is staggering – an average day sees over 113,000 unique browsers researching at least one property website. During that time a total of over 4.7 million pages will be viewed and the total time consumer viewing those pages will exceed 122 million seconds – roughly 34,000 hours!

1

Check your address at myaddress.co.nz

Posted on: October 18th, 2009 | Filed in Technology, Website searching

myaddress.co.nz website - NZ address registerWe may be a small country – but sometimes we do make life hard for ourselves, take addresses for example. Most countries have a post code or Zip code which in some countries represents an area comprising on average less than a dozen or so homes, thereby allowing hyper local addressing. Here in NZ our post code is both little known and at the same time not that granular.

This not only makes for issues with postal systems, but more importantly with emergency services. That is why a new website launched by Terralink International is a great opportunity for NZ to get itself back on the map.

The New Zealand Address Register at www.myaddress.co.nz is an excellent tool to allow home owners to check out the place they call home and make sure it is accurately represented on the mapping system which Terralink operates. This is important as Terralink provide mapping services for the emergency services.

Should you find that your property is not accurately represented – not the right number or street name then this website allows you to send in details to submit proposed changes and thereby allow a more accurate record to be kept so that the emergency services know exactly where you are, especially if your house is known by a name rather than a number, or that your street name has an alias!

For the real estate industry addressing is a critical issue. This tool will be a great opportunity for real estate agents to work with clients to ensure that at the time of any listing or prospecting they can provide assistance to ensure their local knowledge enhances the accuracy of this critical website.

As joint venture partners with Terralink in the property information website of Zoodle, we are pleased to see this initiative come to fruition as it will greatly assist Terralink to maintain a more comprehensive up-to-date database of all properties in the country accurately addressed.

10

Free stuff! – more and more stuff, more and more of the time

Posted on: October 17th, 2009 | Filed in Technology

istock_000004817156xsmallThis week seems to have been for me, pivotal in appreciating the marvels associated with the advancement of technology and the enormous savings that it can bring.

This post is stimulated in part by my current book of choice – Chris Anderson’s new book suitably titled Free. The book is a great sequel to the excellent The Long Tail which I would judge to be required reading for anyone with any interest in online business as it suitably explains the new opportunities enabled by the limitless walls that have for centuries imposed constraints and restrictions on range and selection, something the web liberates us from in so many ways.

Free in some ways continues in the same vein, highlighting and describing as it does the new breadth of free as a business tool. The logic and implications are far reaching and well worth exploring – recommended reading.

The first experience for me this week in relation to technology adding free stuff is that a simple act (a purchase) has given me what I think is a completely free hour each day!

I have purchased a laptop for work – I have taken the leap of faith and gone to the “dark side” as one of my colleagues describes it – I have purchased an Apple (13″ MacBook Pro).

The impact on my life has been truly staggering, in all my business life and what I think amounts to 21 computers over 24 years have never had a PC which demonstrated such a beneficial saving in my time. To what I am eluding is the boot up time (or lack of it!). My old HP sadly had begun to get so painfully slow that I could conservatively say I lost at least 20 minutes per day waiting for full service. Added to this new free time is the entirely intuitive way that Apple software works – and works fast, adding the remaining 40 minutes of free time!

My new Apple has the added benefit of a solid state drive which when combined with the software from Apple means there is literally no boot up time – I open the lid and start typing.

The second example is actually not something that I would choose to benefit from at this time, but when I heard of this benefit when it was relayed to me by my airport taxi driver I was staggered.

The technology of the hybrid car is revolutionary and hopefully in time it will become a core part of every car. The taxi driver told me that his weekly fuel bill with his new car is $200 cheaper!!. Think of it and imagine it, as an independent driver – $200 per week for just changing car. He tells me that he can fill up his tank of his Toyota Prius 1.5l for around $78 and travel around 860 kms. Imagine my embarrassment when I reflect on my own car and its $100 fill up taking me a mere 450 kms around Auckland!

I think we live in the most amazing of times and we are witnessing the most amazing technological advancements – the question though – what relevance to real estate? – not sure to be honest, but heck I was moved to write this and share this wisdom, so maybe some else will be the better for it!

10

What value research when staring reality in the face!

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

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

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

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

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

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

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

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

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

  1. A total of  3 million unique browsers from within NZ visited a total of over 350 websites monitored by Nielsen – this is the unique total many of these visitors will have visited many of these sites
  2. A total of 361,032 unique browsers in NZ visited one of the 25 real estate websites monitored by Nielsen – these are unique users who may have visited a number of the websites – but are not counted twice
  3. A total of 58,298 unique browsers in NZ visited the website of realestate.co.nz viewing 1.5 million pages and spending a total of 54.2 million seconds on the site during those 7 days
These people using these computers made a positive decision in the case of those visiting realestate.co.nz to enter this website in an effort to search property.
I think these facts tell a very simple story – more and more people; more and more of the time; turn to the web to search for everything from flight tickets to books; to hotel reservations; to news and naturally and not surprisingly property information. This trend has one path.
  • To stand and deny it is to try and stand against a hurricane.
  • Here endeth this debate!
18

Beware the cashcow in the coalmine!

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

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

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

“Real estate survey – flawed, useless”!

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

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

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

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

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

Nielsen real estate market survey - June 2009

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

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

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


Nielsen real estate market survey 2006 - 2009

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

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

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

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

6

The critical importance of home broadband

Posted on: October 13th, 2009 | Filed in Technology

Computer mind explosionOver the past 6 months a mix of four friends and colleagues of mine have moved house – something I have not done for more than a decade and that I guess is why I have never payed that much attention to the issue of broadband access at home.

I have had broadband at home for over 9 years, migrating to a wireless network 4 years ago. It works and despite Telecom NZ’s decision to remove my unlimited access plan – much to my disgust I have not thought much of it. It has become like the other utilities of power and water – something we just expect to be there at the flick of a switch.

So imagine my surprise and in someways sense of shock when each of these individuals struggled with the complexities of accessing a new broadband connection at their new home. At worst some have suffered delays of as long as 2 weeks, others a couple of days. The problem seems to be that broadband is like a game of musical chairs!

If you have a connection all well and good, but as soon as you relinquish it someone will snap up the connection and you are left trying to get space in the exchange to get connected. The set up of exchanges is clearly not adequate. It appears that the more people that are connected at an exchange then the more sharing goes on and the slower the connection becomes.

This is why when I received my notification from Telecom the other day they very politely tell me that I can no longer retain my “Go Large” plan with its unlimited data. Sorry they say, we would like to move you to our new “Big Time” plan and by the way just to let you know “we manage all traffic on Big Time to optimise the experience for everyone. When the network is busy (9am to 2am) you may notice reduced speeds

So if I am getting this right – I am now going to have to use the web between those 7 hours of 2am to 9am to see the true benefits of broadband – because if I dare to use the web in “normal” hours I will be putting an undue strain on the system and you will throttle me back!

This is not logical nor particularly customer centric – I have paid my subscription to the service for many years and now for the “greater good” of everyone else I am going to have to accept working in the wee small hours. If this was a true utility like water and power and my usage went up they would provide more capacity (and I would pay for it) – I am in principle happy to pay for better service, but this new plan costs more for a poorer service!

Broadband is and should be a high priority – it is the new catalyst to drive us as a country to greater economic wealth and prosperity – but sorry – you have to accept slower speeds because we all need to use it responsibly and because inadequate investment was made in the upgrade to broadband by Telecom over the years?

8

Hold or Fold – a single example of the madness of the US housing market

Posted on: October 9th, 2009 | Filed in Buying / Selling a home, International, Money Matters

istock_000005422577xsmallImagine listening to talkback radio purely on the subject of real estate – in some ways this is what a recent podcast episode of The Real Estate Guys felt like – as they provided advice to a questioner who was severely “underwater“.

For reference The Real Estate Guys radio show is a US syndicated programme which through the marvels of iTunes you can listen to via podcasting wherever and whenever you like. It is a weekly show on all things to do with property, primarily based around real estate investing. It provides some great insight, discussion and ideas – thoroughly recommend!

Anyway the question the  team were challenged with on this past week’s show “Ask the Real Estate Guys” was as they highlighted, not atypical of many properties in the US.

Mr & Mrs A had bought an investment property a couple of years ago in “an up and coming” satellite town of Merced, California. They were employed earning a reasonable salary and owned their family home with a good degree of  equity presumably not in Merced. This investment property had presumably been an opportunistic purchase to support their retirement income.

The investment property cost them US$198,000 and they bought it with a $190,000 mortgage. It has been rented out, however the rent falls short of the mortgage payments by US$400 per month – Ok’ish when the depreciation is taken into consideration – right?

NO ….Merced is unfortunately as described by Business Week as “Ghost Town”, USA and the property is now worth around $110,000. As the Business Week article states the median price in Merced in 2007 was US$230,440 and in 2008 it had fallen by 38%  to just US$144,000.

So the question asked by Mr & Mrs A to the Real Estate Guys was “what should they do?” – hold or fold. Stick with this devalued investment and the hope that in time it may be worth more than they paid for it, or foreclose and live with the repercussions on their credit score (and let the lender take the hit – this is California after all!).

The team provided guidance for the alternatives.

HOLD and based on 4% annual appreciation after 18 years and a US$4,800 per annum loss, then the net proceeds of sale in 2027 might just pay off the mortgage!

or.. try and finance someone into the house based on a sale and lease back deal based on the good mortgage that the owners had

or.. try and negotiate a short sale with the lender and in so doing mitigate the negative credit impact.

Whilst the team was not there to definitively advise the owners, there was a clear view that the best option was to FOLD – foreclose on the property. Hand back the keys and the title to the property- walk away not owing  a $. All that would eventuate, would be a negative credit rating. Something that could be rectified in time (c. 5 years).

However what I thought was very telling was the comment that in the context of this issue with the bad credit rating – if ever in the future they were to be asked about it “you could always say – but that was 2008/9 – remember how bad things were in that recession – everyone was falling over!!

I find this a salutary example of the double whammy of the US housing disaster – houses that should never have been built, in areas with no demand – sold to people, who should never have taken the risk – financed by debt that was fictitious – then the debt was on-sold to people who were hoodwinked. Then when the house of cards collapses everyone runs for cover – leaving ultimately the government, and thereby by default all tax payers to pick up the pieces. Unfortunately the ripples from this debacle have washed up on most shores of the world and ultimately we all end up paying.

10

Is the housing market killing our economy?

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

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

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

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

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

NZ Property price - annual variance Qv & REINZ data

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

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

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

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

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

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

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

1

International house price movements over the past 2 years

Posted on: October 5th, 2009 | Filed in International, Other interesting reads:

The Economist has just published an excellent graphing tool to aggregate the house price index of the leading property markets for which data is available.

The Economist - House Price Index Q1 2007 to Q1 2009Covering 20 countries the chart allows for the comparative plotting of countries and their bubbles and busts especially over the past 2 years.

Examining the data highlights some facts. For whilst the global property market has arrested over the past 2 years as the global recession took hold, there were those markets that faired better than the worst performers.

In fact 7 of the 20 countries measured, have ended the past 2 years with price indices higher – 4 of them over 5% higher and in the case of Hong Kong over 15% higher. These 7 countries shown in the chart to the right were Hong Kong, China, Switzerland, Australia, South Africa, Italy and Sweden which appears to have made a last minute rally to return to positive growth.

The Economist - house price index falls Q1 2007 to Q1 2009 - The majority of the 20 countries though saw falls in house price index. Naturally as would be expected the USA shows the greatest decline hitting an index of 70 (30% down at the end of 2008) and showing some early Q1 recovery in 2008. Most of the other markets show between 5% and 15% decline.

The NZ data in the report and charts is surfaced from QV and shows a 9% decline at Q1 2009, although the latest QV data for August 2009 shows a 2.8% decline.

The Economist also highlighted in it’s article some markets where the graph would have almost been inadequate to reflect the scale of price fall – Latvia suffered a fall of 60% fall and United Arab Emirates a nearly 40% decline in house price index.

Page 60 of 91« First...102030...5859606162...708090...Last »