The Unconditional Blog

The impartial voice of the industry


Lehman Bros collapse and the impact on the property market

Posted on: September 14th, 2009 | Filed in Media commmentary, Website searching

NZ Herald - 14 Sep 09The NZ Herald article today tracking the fall out from the 15th September 2008 collapse of Lehman Bros cites the consequential impact on website traffic.

The specific chart to which the article refers is presented below. The chart measures the weekly total sessions (number of NZ website visitors) across a basket of 7 real estate websites – the leading sites including, trade me property, Harcourts, Open2view and other. The chart is indexed based on a rolling 52 week average to thereby exclude the inherent growth of web traffic and in so doing provides a clearer view of seasonality and market trends.

Real estate web traffic - total industry sessions 2007 & 2008

The key takeaway from this chart is that in comparing 2008 weekly traffic to 2007  it is very clear how the global economic recession significantly impacted property viewing online as a surrogate of consumer confidence in the property market either by active buyers or casual observers. The 2008 line starts the year below 2007 and never once does it really show any demonstration of exceeding that performance. Compare this to the latest chart for 2009 which shows the far more active level for this year to date.

The component of this 2008 chart that relates to the Lehman Bros collapse can better be seen in the exploded chart below.

Sep 2008 and the Lehman Bros impact on NZ real estate web traffic

Here is where the 2007 performance shows a more traditional seasonal upturn in the spring. For 2008 that upturn did began in late August with a strong couple of weeks until as shown the 15 September week’s performance kicked in. However from then on the differential performance to 2007 only grew wider and consequentially from an online searching perspective the real estate market failed to have a spring pick up – remaining very quiet through to the end of the year and the traditional seasonal downturn at Christmas.


What really drives the property market?

Posted on: September 14th, 2009 | Filed in Media commmentary

As the anniversary of the collapse of Lehman Brothers approaches this week, we are being warned just 12 months later to not get too excited that this “earlier than expected economic recovery” will lead to a false sense of security that prosperous times are just around the corner.

The key question though always seems to be – what are the drivers of economic prosperity or recession, or put it another way what drives the turning point that takes us from stable growth – to bubble – to bubble bursting – to recovery?

It was with this in mind that lead me to find this very interesting article published in the New York Times business supplement the other week by no less an economic luminary as Professor Robert Shiller – the individual who lends his name to the famous US house price index – the Case Shiller index.

The premise of his article is that whilst the drivers of economies are well known, what is little understood are the accelerants of such drivers. He describes social epidemics largely as feedback loops driven in part by the media (both mainstream and social media) whereby literally the occurrence of positive stories can add to and accelerate a sense of optimism which can drive further optimism; whereas the media’s coverage of economic collapse and recession accelerates this condition.

As he says in the article:

At first, the feedback explanation may sound too simple, and may suggest that the stock market and its turning points are easy to predict. But because day-to-day noise shrouds these changes, and because the stories change in their retelling and as new evidence emerges, the process is actually very complex.

This concept seems to in someways fit the scenarios observed here in NZ in relation to the property market. Back last year I wrote a post entitled “Media seriously impacts the psyche of NZ’ers when it comes to property“. This provided a perspective of the correlation between media coverage and the level of interest in property as represented by traffic to a collection of the leading real estate websites.

At that time back in April 2008 the property market was starting its slide and early signs were seen in the tailing off of property viewing online. Coming forward to today some 18 months later and with the benefit of hindsight the trend of decling interest in property can be clearly seen from the chart below which having begin in early 2008 ran through until early 2009 at an indexed basis less than 2008. However as the new year dawned and economic recovery started to be reported and talked about so the market as reflective of website traffic began to turn up – and up!.

NZ Online real estate traffic to Aug 09

This observation and correlation may well go some way to be provide some degree of support to Professor Shiller’s view.


NZ Property websites – August another record level of traffic

Posted on: September 10th, 2009 | Filed in Website news, Website searching

A number of recent search queries on this blog have originated from the question “what are the latest numbers for web traffic on real estate websites?” – so in a spirit of openness and transparency, here are the latest stats for August from Nielsen Online.

In the month of August a total of 1,489,294 unique browsers visited at least one of the real estate website tracked by Nielsen during the month. That is up 17% on a year ago and now represents the highest ever month. The previous record was just last month with 1,415,803. As can be seen from the chart below the rise of real estate web traffic has been steady and progressive over the past 4 year when back then 500,000 unique browsers was a record.

NZ real estate web traffic - total UB's to August 2009

Whilst the traffic may have grown 3 fold over the past 4 years the sales and buyer demand has not grown anything like that level. This demonstrates firstly the growing dominance of the web as the most utilised and valued source of real estate information, but also that online browsing of real estate listings  – and especially those of appealing lifestyle property is a very active kiwi pastime!

In terms of which websites are being viewed the table below charts the top 10 websites on the same metric of total unique browsers in the month of August 2009.


What is noticable from the table is the growing polarisation of audience – those property portals ( and trade me property) are stretching the lead. This is a function of the appeal of their respective offerings – in the case of, the most comprehensive content and in the case of trade me property, private sellers.

A final metric of the market for online real estate websites is the relative growth on a year-on-year basis. The total audience of all real estate websites is up 17% – indiviudally the growth of individual website from within the top 10 in most cases exceeds that growth  further demonstrating the polarisation to the major top sites.

Naturally we are delighted to see that is up a staggering 50% in a year delivering close to 400,000 unique browsers in the month of keen property searchers both here in NZ and from overseas.

% growth in we traffic for real estate websites NZ - August 2009


Tracking mortgagee property listings

Posted on: September 7th, 2009 | Filed in Buying / Selling a home

The latest set of data on the property market shows what have consistently been called the “green shoots” of a recovery with stronger sales as reported by Barfoot & Thompson last week and QV today.

However despite these indicators there is still a flow of properties coming onto the market as a consequence of repossessions as the fall out from the recession and growing unemployment.

The recorded sales of mortgagee properties as measured and tracked by Terralink International and reported on Zoodle shows that the peak has yet to be reached with 289 sales in the month of June of this year, up 195% on a year ago.

Mortgagee property listings have been tracked now on the site over the past 18 months and as can be seen from the chart below the peak of the inventory levels would be seen to be behind us. As of today there are just over 300 property listings (excluding sections) on the market being marketed as mortgagee auctions or mortgagee tenders. The peak of the market over the past 18 months has topped over 400 such listings, with as recently as May of this year seeing this peak.

Mortgagee listings

Measuring the number of mortgagee properties actively being marketed at any one time provides one view, however given the urgent need to clear mortgagee property as a function of the lenders wishing to clear the debt liability, the number of new listings coming onto the market does provide a clearer lead-indicator of the health of this segment of the market.

The chart below tracks the number of new mortgagee listings added to the website by month since the beginning of 2007 – measured as a % of all new listings.

New listings of mortgagee properties added each month sicne Jan 2007 -

As can be seen the flow onto the market continues to rise and given the erratic movement of the past 2 months it is not clear that a peak has been reached as yet. Having said that the fact is that the number of mortgagee properties listed each month still represents less than 2.5% of all new listings or put another way less than 1 property in every 40 is a mortgagee sale.


Compelling images really sell a property (Updated)

Posted on: September 3rd, 2009 | Filed in Online marketing

With an average of 350 new listings coming onto the website everyday at the moment as we head into spring you can get a bit overawed with the property for sale in NZ. However every once in a while there is a property that appears on the site that makes a lasting impression – just such a property caught my eye today.

Omokoroa property for sale on this is a very impressive property comprising 6 bedrooms and therefore you could argue that it is bound to be more of a dream property. I do believe that a key component of what caught my eye was the quality of the photography. The vendor in consultation with the agent chose to get in a professional photographer and create a very appealing and engaging portfolio of images.

These 16 photos are a superb example in my judgement of how to really market real estate. Those photos are the most powerful and effective way of grabbing attention as a would-be buyer scans the website and the search results. This property rightfully jumps out and says in confident and arresting tone “Check out this house”. As a vendor that is what you want from marketing and this is what the property achieves.

The proof is in the pudding – in just 7 days the property has been viewed over 1,000 times – the fact that it is a featured listing on the website is certainly one reason for the success, but without those powerful images the results would undoubtedly be somewhat less.


Added to the photography is a very compelling summary of the selling points of the property as well as the surrounding community, coupled with a map to provide locational information, this listing comes close to a perfect presentation – the only missing piece is probably the asking price expectation which is so often requested by users sharing their feedback with us on the site.

All of this supports the key finding from the latest Nielsen Online survey into the real estate market. The research surveyed over 1,200 people actively using real estate websites here in NZ during June.

A key question asked was “How useful do you feel the following online resources would be in helping you to research properties and find relevant properties for sale?

The results as seen from the chart below are unambiguous – consumers are telling us they want loads of large high quality images, this helps them make good informed decision as to how the property looks in all rooms and from all angles.

Additionally consumers want context – where it is and what is its surrounding neighbourhood like – this comes from an accurate address which can be mapped.

Lastly consumers want an accurate price indication – they want to know if this dream home really matches their budget.

These are what the consumers want – as a website operator this is what we want so as to provide the searching buyers on the site with what they want – to achieve this we need to get the real estate industry to embrace this message of rich, compelling content – that is a constant part of our role here at

Nielsen research of the NZ real estate market top 13 wish list for buyers

Update 4th September

Below is a further chart providing results from the Nielsen survey showing additional items that buyers are keen to see presented on real estate websites.

Nielsen Research of the NZ real estate market wish list for buyers pt 2


NZ Property Report – August 2009

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

Click here to dowload the full report (1Mb pdf)The key metrics of the current property market reflect a very stable position – stable asking price, stable level of inventory and stable levels of new listings. Whilst this is a far better position for the market than a year ago there is concern that the slight rise in new listings seen in July matched to a similar level in August may not be sufficient to meet the demand being seen in the market at this time.

Spring is one of the most active periods of the year and with constraint of new listings; the market may not be able to meet this demand without consequential impact on prices. However this scenario is as yet not being witnessed in the asking price expectation which remains steady and still represents a 7% decline from the peak of the market.

This sentiment in the market is reflected in the comments of real estate agents. Mike Elford, President of the Real Estate Institute of NZ (REINZ) commented

The market has certainly recovered well from the lows of mid-2008, and heading into spring could well see some more healthy activity, however as ever the market is reliant on an adequate inventory of listings to meet buyer expectations

Asking Price

NZ Property Report Aug 09 - Asking price vendor’s expectation of asking price for properties coming onto the market in August remained stable with barely any change from the prior month.

The truncated mean price for the 10,644 listings added in the month was $397,187. This represents a 0.8% fall in asking price when compared to the moving average of the past 3 months (May/Jun/Jul).

The asking price of new listings in August last year was almost the identical asking price of $397,053.

New Listings

NZ Property Report Aug 09 - new listings : number of new listings coming onto the market fell to 10,644, from the July total of 10,773. This was below the expected level anticipated as a result of Spring seasonal upturn.

As compared to August last year when there was 10,860 new listings added to the market, this past month represents a fall of 2% from a year ago.

The graph provides a view of the continued relatively low level of new listings coming onto the market this year.


NZ Property Report Aug 09 - Inventory of properties for sale : fairly flat level of new listings matched to steady sales level the available inventory (measured in terms of “the number of weeks to clear all the stock of houses on the market) rose very slightly to 32.6 weeks.

The level of inventory on a national basis is up considerably from the lows of 2007 (24 weeks), but down considerably on the highs of 2008 (50 weeks).

Regional Summary – Asking price expectations

NZ Property Report August 2009 - regional asking price : asking price expectation of vendors steadied across the regions in the month of August with 10 of the 19 regions showing asking price falls, however only 8 were greater than 1%.

There were 4 regions – Northland, Gisborne, Marlborough and the Central Otago / Lakes district that showed asking price declines of over 5%. The nationally asking price moved only marginally down 0.8% as compared to the prior 3 months.

The main centers of Auckland and Christchurch showed virtually no asking price movement whilst Wellington showed an increase in asking price of 2.6%. There were only 2 regions showing asking price expectation rises of more than 5% – Central North Island and Manawatu / Wanganui.

Regional Summary – listings

NZ Property Report August 2009 - regional new listings : level of new listing across the regions reflected the national picture with most variances to August last year of the order of less than 10%.

Of the 19 regions only 8 showed increases in new listings; only one of which – the Waikato showed an increase of 20%.

In contrast 3 regions – Central North Island, Manawatu / Wanganui and Marlborough reported listings decline of over 30%.

Overall the sentiment of the market is stable with a slight leaning to a sellers market especially given the lack of year on year increases of new listings. This is especially relevant when viewing the very depressed state of the property market in August 2008.

Regional Summary – inventory

NZ Property Report August 2009 - regional inventory : a consequence of the lack of new listings rises anticipated with the oncoming spring seasonal, the inventory levels continue to hover at low levels. Nationally at 33 weeks down 34% on a year ago.

The chart attempts to estimate the propensity of region to be experiencing a buyers or sellers market based on inventory as compared to historical averages.

In overall terms there is a sense of balance in the market between buyers and sellers with the majority of regions showing levels in line with long term averages. The key centers of Auckland, Wellington and Christchurch however still show continued signs of low inventory including Wellington which continues to hover at around just 15 weeks.

The regions of Coromandel and the West Coast continue to show signs of high inventory.


liNZ Property Report August 2009 - new listings for lifestyle properties : to the picture for total listings, lifestyle properties added to the site in August fell short of the pickup seen in July. For the month 886 listings were added a 1% increase on August last year.

The truncated mean asking price expectation from vendors of lifestyle properties in August was $553,347 a 3% decline over the preceding 3 month average and a 1% decline in the same month last year.

Regions showing consistent increases in inventory were the Bay of Plenty with 85 new listings, more than double August last year and 15% up on the rolling 3 month average. Equally the Coromandel continues to show increases of 47% up on prior year. Finally Manawatu / Wanganui with 76 new listings was up 27% on prior year. Regions showing consistent falls in new listings were the Hawkes Bay, Taranaki, Otago, Marlborough, Wairarapa and the Central North Island


NZ Property Report August 2009 - new listings for apartments : apartment market shows steady levels of new listings with 595 added in August representing a 13% increase on the prior year. Again Auckland dominates the apartment market and with 369 apartments listed in the month showed a 19% increase from August last year.

The asking price of apartments nationally in July fell 7% from the prior quarter average to a new level of $368,291. As compared to August last year the current asking price shows a decline of 7%. The asking price of Auckland apartments in the month was $335,792, down 6% on last year.

The full report can be downloaded here (1MB pdf document).
The next NZ Property Report for September 2009 will be published on Thursday 1st October at 10am.


The most comprehensive website will always triumph

Posted on: August 29th, 2009 | Filed in Website searching

istock_000002552215xsmallI have a passionate love of listening to podcasts. They allow you to so much more effectively use your time to become better informed accessing news and information from around the world brought to you for free through the iTunes service.

So it was I was listening to a podcast the other day from Harvard Business – the title spiked my interest:

Will Go the Way of Newspapers?

If you did not know it is, or has been up to this point in time, the gorilla when it comes to job searching online in the USA. This podcast was a transcript of a blog post from Tom Davenport who holds the President’s Chair in Information Technology and Management at Babson College. The concept of relinqishing its mantle on job searching seems inprobable, but that is exactly the premise he suggest could happen. That was enough to hold my attention in listing to his hypothesis.

His premise is that recently aggregator sites have started to erode the power of monster – sites such as SimplyHired, Jobster, Craigs list and of course Google base. Such sites he says have the advanatge of being able to aggregate all listings of jobs rather than just the ones found on Monster.

This naturally got me thinking as to how he would view the real estate market online for certainly in the UK a new entrant Globrix has shaken up the market as an aggregator of content from many websites undertaken by scrapping content. The simple premise of such aggregator sites is that the more comprehensive the content on any one website the more the public will judge that site to be the most valuable to visit. Whilst in the UK Globrix has acheived significant growth it has not dented the #1 incumbent player – Rightmove for 2 reasons.

  1. Rightmove already has the most comprehensive content with over 90% of all real estate offices subscribing – these offices judge value from the service
  2. Globrix can only ever provide half the service the public want – scratch the surface and you discover that Globrix is a search site speedily handing you off to another site to search for information. The public find this experience jarring and judge a site on content as much as seemless consistent experience of searching, saving, analysing and enquiring about property. Something that RightMove does better than anyone else.

So what about NZ ?

Well here we have one website for real estate which has over 93% of all the listings of real estate agents – The most comprehensive website for real estate in NZ. As the chart below shows on the catgories of property for sale, be it homes (including sections and lifestyle), farms, commercial property or businesse;s holds a more comprehensive selection than Trade me property.

listings comparison between realestateconz and trade me property Jul 09

So do we at fear we will go the way of the newspapers? – certainly not!

We are focussed to continuing to develop the website to provide the most rewarding and valuable searching experience as a partner in the property buying process, providing the single most comprehensive source of listings of real estate of any NZ website. That is our commitment to the property seekers of NZ and our customers – the real estate profession of NZ.


Newspapers big losers as property searchers stampede online

Posted on: August 25th, 2009 | Filed in Buying / Selling a home, Online marketing, Website searching

Each year around this time there is heated anticipation for the release of the annual Nielsen Real Estate Market Report. This comprehensive survey of property buyers and sellers has become a seminal guidebook to the trends in real estate as it has been undertaken in each of the past 4 years.

The survey (which is undertaken through an online survey) covers many aspects of consumer behaviour, attitudes and awareness of the industry and each year new insights and critical trends emerge.

This year one chart from the amongst one hundred pages of the report leaped out and said in a confident and striking manner – LOOK AT ME!

A total of 1,206 people were asked the question:

Thinking about the different media and other things that you consult for the purpose of researching real estate, how useful do you perceive the following?

The respondents were shown a list of 14 sources of real estate information – everything from TV and real estate office window displays to magazines, newspapers and the web, in all their different forms. The respondents were then asked to rate each by how useful they though each was. The chart below compares the 2 major competing media – newspapers and specialist real estate websites.

Nielsen Online real estate market report 2009 - usefulness of media

The results are staggering with 95% of people saying that specialist real estate websites were “useful or very useful” as compared to just 49% for newspapers – taking the judgement of “very useful”; less than 1 in 10 judged newspapers as “very useful”, whereas with specialist real estate websites 2 out of 3 judged them “very useful”.

Evaluating all of the 14 media options as to how many had been consulted in the past week equally startling trends emerged, comparing this year to last year.

Nielsen Online real estate market report 2009 - media consulted last week

Right up at the top of the list is specialist real estate websites; up from 69% last year to 78% this year. Other web options of company websites and search engines showed growth at 63% and 38% respectively.

However the print versions of real estate saw significant declines. Specialist magazines remain relevant although falling from 55% to just 46%. Local newspapers fell from 49% to 40% and then far behind was national / metropolitan newspapers down from 43% last year to just 31% this year – this means that now less than a third of all property researchers surveyed consulted metropolitan newspapers in the past week.

These figures are in some ways not that alarming as the rise in traffic to real estate websites has been enormous over the past few years, however despite this and despite the behaviour of buyers and sellers in using the web as the primary means of researching real estate – the real estate industry still has a love affair with printed publications, demonstrated by the colossal scale of investment of vendors money in print media, with so little relatively being placed in online media advertising of property.

I can’t help recounting a moment sitting just last month listening to a panel discussion at the Inman Connect Conference in San Francisco. I was not surprised. Nor were any of my fellow participants. One after another real estate agents shared their approach to marketing-about both marketing of themselves and of their clients’ properties. Not one of them mentioned newspapers. There are some agents in NZ who share this ethos and maybe in time we will see more; however I think the onus may need to come from property sellers to share their view on the appropriateness of online vs. offline when it comes to vendor-paid-marketing.

Update 25 September : pdf copies of these charts are downloadable here – Usefulness of different media and used in the last week.


Greater disclosure of leaky homes advocated

Posted on: August 24th, 2009 | Filed in Architecture & Construction

istock_000000248264xsmallA timely piece in today’s NZ Herald brings to light the advocacy of greater transparency of potential issues surrounding leaky homes. Steve Koerber – an agent with Barfoot & Thompson shares his view that greater information should be provided to protect wouldbe purchasers, especially new immigrants.

In principle more transparency is to be championed, however identification of leaky homes and equally identification of non-leaky homes is not an exact science by any means.

Whilst the technology of detection has improved enormously over the past few years; without wholesale removal of cladding materials the extent of damage cannot be accessed. In fact the use of the term leaky homes is a degree of a misnomer – the fact is the leaking or egress of water is not in of itself the problem (houses have had leaks for years), it is the inadequate ventilation and appropriateness of construction materials and systems to protect buildings which ultimately lead to the structural damage to properties which is the problem.

As to the role of agents highlighting the impact of “leaky homes” – it is only recently that a few properties have been marketed as being leaky homes and are deliberately targeted to developers looking to take on such a project. Clearly every buyer wants to know for certain that the house they are proposing to buy is not a leaky home, however real estate agents act as selling agents for the seller and whilst they will always seek the most complete information on a property they can, they are not building inspectors, nor surveyors and therefore cannot be expected to provide any form of cast iron guarantee on a property beyond what the owner of the property shares with them.

Just as car buyers will judge the value of a pre-purchase inspection so should it be with a property.

A quick search on the website today reveals that there are only 13 listings that use the keyword of “leaky home” from amongst the 51,176 homes and lifestyle properties that are being marketed as for sale.

Of these 13, seven are properties with leaky home issues identified: a 4 bedroom house in Coastville, two townhouses in Henderson Valley, another townhouse in Mt Eden, a 3 bedroom townhouse in Mangere, a 4 bedroom property in Birkenhead described as “Stylish leaky home” and a 3 bedroom apartment in Auckland city.

On the other hand there are 6 properties which all claim to be in one form or another not likely to be prone to “leaky home” syndrome.

Properties listed on marketed as unlikely to be impacted by leaky home syndrome

Whilst the industry and the government may wish to see more transparency to provide protection to consumers on an issues such as this, it is very difficult and potentially very risky to make hard and fast statements one way or another. The best solution as advocated by Steve Koerber may be the implementation of a regulated inspection report for properties built since 1991.


TV drama, rather than a documentary best captures the financial crisis

Posted on: August 24th, 2009 | Filed in Money Matters

This is actually a paraphrased quote from the writer-director of the BBC drama Freefall which was aired on TV ONE last night.

The drama for me perfectly captured the immoral and hedonistic period in the lead up to the financial crisis of 2008 by showing the real life of three layers of society directly affected by sub prime mortgage creation, lending and trading in the UK.

In the consequential fall out from the crisis the drama plays out the impact on the lives of the self same parties as their lives unravel as a consequence of collapse of the financial market built on unsound foundations.

The drama I would judge is an excellent piece of education of the circumstances and the real personal impact that the sub prime debacle caused.

My only criticism is that the outcome for those at the bottom rung of the financial and housing ladder were ultimately portrayed as being able to return to some form of normal life, which as a consequence of the horror that they must have gone through with mortgagee reposition and likely bankruptcy as well as loss of job was somewhat far from reality. By contrast the party with the least moral scrupples naturally survived to battle another day in a continued effort to sell people on dreams that seldom approached reality – a very real circumstance.

I would thoroughly recommend it should be aired again or available on demand.

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