The Unconditional Blog

The impartial voice of the industry


Twitter – a personal perspective

Posted on: March 23rd, 2009 | Filed in Agent Tips, Cool sites, The lighter side

istock_000000969383xsmallThe decision by NZ Post to cease collections over the weekend is yet another reminder of how our wired (or wireless) world continues to dominate our lives. Whilst the advent of the web has actually delivered benefits to mail delivery services around the world as a function of online ordering, the reality is less of us actually put anything in an envelope and walk down to the local post box.

More and more of us find the immediacy of email, blogs and now the fast emerging experience of Twitter is the most efficient and rewarding experience to keep in touch with friends, colleagues and connectors.

Twitter seems to have come from nowhere in the space of barely 3 months to be the thing almost everyone I know is talking about. I recall that I first heard about it at a conference in the states 18 months ago and at the time I said to myself a combination of:

  • “Tweet” ??”
  • “Why does anyone want to know what I am doing”
  • “I don’t want people following me”

Subsequently I have come to appreciate the merits of Twitter. For me the most compelling statement made about it came from a well respected online commentator who said in one of his frequent podcast episodes “the most frequent comment I hear from advocates of Twitter is that they all at some stage or other have said – I don’t get it!” – I can relate to that, I didn’t get it until 4 months ago when I started to get it and I started to use it!


Here is my take on Twitter:

  • It is a mico blog – and just with blogging it can mean various things to various people
  • It does not really matter who follows you – let them; it is there life and if they are fascinated to read my tweets then great, if they “unsubscribe” to my tweets then fine, my life does not revolve around them
  • I follow people I know and Tweeters who provide valuable insight and information – these are more often than not businesses rather than people who provide a steady stream of insightful comment in the form of content links not unlike an RSS feed, but far more organic
  • I tweet on a combination of subjects – my thoughts on and insight on the real estate market, things that I observe in my everyday life, events and things I discover.

When people follow me and this is brought to my attention I undertake two quick checks – firstly do I know this person? –  if so, I may follow them (they are part of my circle of friends / influence). If they are not someone I know I look to see what they post, if they are mainly posting a combination of answers to questions from others or they post about the minutia of their lives I just don’t follow them . What I am looking for in my twitter stream is interesting news and insight.

Happy tweeting ! – you can follow me at alistairnz – but don’t be offended if I don’t follow you – you will now know why. As to the relevance to real estate  well I recall writing a piece on just this subject back in August last year – have a read “Does Twitter have a place in real estate“.


Smart online advertising is worth celebrating

Posted on: March 18th, 2009 | Filed in Online marketing, Uncategorized

I was impressed the other day to see a great example of engaging advertising on our website. The advert for Westpac demonstrated that flashing banners is not the only way to achieve impact – their approach courtesy Saatchi & Saatchi DGS, is far more engaging and to my mind memorable.

The technique they have deployed as shown in the screenshots below is what is termed an expanding skyscraper – when you hover over the vertical advert the “dream bubble” expands over the listing photo of one of the listings on the site – thereby creating a warm and engaging dream of a new home for the characters in the sketch advert.

Westpac online advertising on online advertising for Westpac on

This is in my judgment contextually relevant and put a smile on my face.

The fact is that more and more advertisers are moving their advertising budgets online. The final quarterly survey from the Interactive Advertising Bureau (IAB) showed that online now accounts for 8% of all advertising spend and in the last year online grew by over 42% to $193m – the growth of of over $58m coming from other media as the total spend for all media showed  no appreciable growth.

Clearly for a site like advertising is an important and growing part of our revenue, it is great to see the innovation in creative being applied to the medium. I also understand that the client is delighted with the performance of this advert as judged by the click through rate which is one measure of the success of such a campaign – ie. the nmber of people who have clicked on the advert to take them to the websites of the advert – in this case Westpac.


Discussion: The housing crisis lies in lack of supply, not falling prices

Posted on: March 16th, 2009 | Filed in Media commmentary, Real Estate Industry

An article published today in the NZ Herald titled Housing crisis lies in lack of supply, not falling prices is sure to provoke some healthy debate. The article by Charles Lowndes a professional real estate agent with over 30 years experience both here and abroad, provides a perspective of the outlook for the real estate market in the coming years. The limitation of the article in both print and online is the inability for comments to be made as to the support or rejection of the hypothesis, that is why this blog can provide such an environment for discussion.

The article is written by a real estate agent and this is bound to bring the predictable call of “self interested promotion of the market” – however I find this attitude surprising when one would usually tend to respect the views of a person who has dedicated their 30 year career to understanding their industry. Further commentators in the financial services industry never seem to be tarred with the same brush when they dissect their market – after all financial service companies earn commissions trading financial products

The article makes the proposition that the combination of strong immigration as a function of the global recession matched to the stalled market for the building of new homes will put pressure on the supply side of the market in NZ. Now there may not be a crisis of supply, but the reality of the market needs to be recognised.

The content of the article draws parallels with recent posts on this blog – earlier this month in the post “Emerging concern over supply of new homes as consents plummet” it was highlighted to the extent to which consents had fallen below the supply level required to meet market demand. NZ unlike the US market does not have a surplus of new homes which are unoccupied. The 80,000 homes for sale as listings on are in the majority occupied and are being sold so home owners can move on.

The post just last week “Examining facts on the state of the real estate market” spoke to the growing interest in the property market. Subsequent to this article and others written last week there has been those who have claimed that the market is not awakening, citing the year on year performance of February 2009 with 2008 (down 18%) and 2007 (down 44%). These figures are true however a perspective overlooked in all these analysis is the relative growth at this time of year. There is no doubt that due to concerns about unemployment and tighter credit from lenders the market in terms of property sales is at an all time low, but as the chart shows below the relative growth between January and February this year is far in excess of the seasonal trend.

NZ property sales - Jan and Feb in prior years


Mortgagee sales data reinforces the trends highlighted in listings data

Posted on: March 11th, 2009 | Filed in Buying / Selling a home

Terralink mortgagee sales report Mar 2009The Mortgagee Sales Report released today by Terralink confirms the trend that has been reported on this blog and on over the past year – mortgagee sales are on the rise.

Whereas up until now the information on mortgagee sales has been restricted to analysis of listings numbers and search enquiries, the data analysed by Terralink shows the legal transactions of registered sales which have been completed with the original mortgage lender as the registered seller of the property having assumed the title for the property from the mortgagee defaulter.

The headline data shows that in the last month of reporting (Dec ’08) a total of 191 properties were sold as registered mortgagee sales, this represents 4.4% of the reported sales as measured by REINZ data for the month. For the whole of 2008 a total of 1,303 mortgagee sales were registered up from 475 in 2007. For 2008 this represented 2.3% of all sales over the calendar year.

The data previously presented on this blog has provided insight into the growth of listings which are being advertising using the word mortgagee, these have risen from less than 100 throughout 2007 to a total now of well over 400. The graph below shows the mapping of sales and listings by month for the past 2 years. Clearly highlighting the correlation between listings and sales. This fact is to an extent self-evident given the fact that a mortgagee listing is only listed when it has to be sold and all mortgagee listings are sold by real estate agents on behalf of the mortgage lender.

Mortgagee sales and listings data Terralink Mar 2009

Clearly the trend of the graph showing the rise in listings over the first few months of 2009 will likely lead to a further rise in the sale of mortgagee properties as the economic impact of the global recesssion bites. However it is really important to put these numbers into perspective as against other worldwide markets – the USA beinga  case in point where in 2008 the equivalent of mortgagee listings (foreclosure) represented 45% of all sales – here in NZ 2008 mortgagee sales represented 2.3% of sales and currently the number of properties advertised for sale as mortgagee listings even at 440 represent less than 0.5% of all property listings.


Examining facts on the state of the real estate market

Posted on: March 10th, 2009 | Filed in Buying / Selling a home, Website searching

At this time there seems to be a steady debate as to the health of the property market and the usual collection of critical questions:

Have we reached the bottom? / Are property prices going to dive? / is this a good time to buy? / should I sit tight and save for the future?

As I stated in the interview on TV One’s Breakfast the best advice I would offer is research, research, research. To assist in this process I have collected together what I think are the key statistics on the market today. These statistics provide an insight into the general level of interest in property, the degree of supply of properties onto the market, the level of enquiry of agents regarding properties and the current level of sales. These statistics are accurate objective numbers and are presented showing at least 2 years data. I have not included any data on price movements, these are well communicated in other articles, equally my belief is in the need to look for liquidity in the property market as a forward looking indicator – price is a market messaging device, but without sales there is no property market.

I should make one observation at this stage. All of this data is based on the whole country and therefore are an aggregation. Clearly within a suburb or region the scale and trend may be somewhat different. It is important to better understand your local market to really be well informed, however a combination of these statistics and the great information to be found on Zoodle will go a long way to assist property seekers to be better informed.

Interest in property searches

The web is now the most actively used medium for real estate search. Recent research from the US indicates that 82% of all real estate transactions involve the internet at some stage (NAR Survey of home buyers 2008). It is therefore safe to say that the level of web site traffic to real estate listings on a comparative basis can provide an indication as to the health of the market. The graph below shows the indexed level of traffic to all NZ websites featuring real estate listings based on Nielsen Online domestic traffic. (The index weekly tracking tries to eliminate the inherent growth of web traffic as a function of growing broadband penetration).

NZ real estate online traffic of domestic visitors March 2009

The blue line representing current levels of web traffic is showing a more sustained growth than the same time last year. Last year was characteristed by two very marked downturns in viewing activity – in late March at the time the awareness of the economic downturn started to be reported; and then again in the middle of September when the banking collapses dampened any spring burst of activity.

Inventory – the supply side of the market

Tracking the number of listings on the market and the number of new listings coming onto the market provides a view of the supply side of the market. The graph below shows that the NZ market continues to be burdened by a large number of listings. At this time there are just over 116,000 listings on This is represented by the blue area of the chart, compared to 18 months ago the level has increased by over 30,000. However the majority of the increase occurred in the period Feb – May 2008.

Listings of NZ real estate on - Mar 09

Whilst listings did slip downwards in the early spring of 2008, they did rise again to the current level prior to Christmas. The red line (left hand axis) tracks the number of weekly listings added to the website. The most telling information from examining this line is the very high level of listings coming onto the market in the Jan / Feb period of 2008 (4,500 per week), 12 months later whilst showing a similar pick up after the Christmas holiday dip the level of new listings is down relatively to less than 4,000. This is very likely to be a function of better informed vendor recognising the quieter selling market.

As a point of note these stats cover all listing types and therefore cannot be used to compare directly with property sales – the data does provide a guide to property movements as residential property does constitute the largest portion of the listings (c. 70%).

Real estate enquiries

Whilst traffic to websites provide a guide to the level of interest – emails enquiries sent out from to real estate agents does more accurately reflect intention to act by prospective buyers. The graph below uses an index basis to track the past 2 years weekly enquiry levels.

Level of email enquiry to agents from - Mar 2009

The blue line for 2009 activity whilst not reaching the peak of activity witnessed in Jan / Feb 2008 is still showing an activity level ahead of 2007. The peak of enquiry appears to have occured in the last week of February at a point that cut throught the 2008 level. Whilst it is not clear where 2009 will proceed from here the historical trends of this graph have been effective in indicating consumer sentiment. The most conspicuous demonstration of this was the collapse of enquiry in Sep 2008 at the time of traditional spring resurgence and equally the rise in the pre-Christmas period which mirrored sales activity at those times.

Property Sales

The February statistics for sales as reported by the REINZ will be released within the next week. The graph below shows the actual sales of property for the past 8 years up to Jan 2009.

NZ Property sales 2000 to 2009

Clearly as seen from this there is no sign yet of a pick up in sales with the January figures hitting an all time low. As to the future predictions I would venture to suggest that 2009 will see a turning point in sales – the rationale for this is the subject of a blog post written on the Zoodle blog in January titled “Property sales likely to pick up in 2009” which I would encourage a review for insight into the relative state of sales.


Latest QV property values – Feb 2009 : Video interview

Posted on: March 9th, 2009 | Filed in Buying / Selling a home

The latest QV figures highlight a current year on year price decline of 8.9%, this is now becoming a familiar theme of recent data released on the property market.

To provide insight to this data and other indicators of the market and the overall real estate industry as seen from my role as CEO of here is an interview from Breakfast on TV One this morning (4 minutes).


Barfoot & Thompson sales data for February shows some modest thawing of the market

Posted on: March 5th, 2009 | Filed in Real Estate Industry

The February sales for Barfoot & Thompson as representative of a large portion of the Auckland market certainly seem to reinforce the view that there is life in the real estate market. Harking back to an analogy I used last year in a post which as ever with the benefit of hindsight was a little optimistic – not a buoyant resurgence by any means, more of a thawing of once frost-bitten fingers.

A total of 559 sales shows a 9% increase over January, however still 7% down on February last year – a time when clearly we were all seeing the signs of a fast slowing of sales volumes. As presented in the chart below the 3 month moving average sales volume (blue bars) shows a fairly flat level at 512 for the 3 months ending Feb ’09 although as shown by the red line the rate of decline in sales is slowing and projecting forward should see volumes start to show a year-on-year growth from March, especially as March is traditionally a strong sales month. Not a rampant market by any means, but a more liquid market where buyers are more active than we have seen for the majority of 2008.

Auckland sales data from Barfoot & Thompson Feb 09

Making assumptions based on the typical share that Barfoot & Thompson represents of the NZ market it could be that national sales figures due out later next week from the REINZ might well show a figure for February of close of 5,000 sales. That would be a good performance when compared to January which presented an all time low of just 3,706 sales. We have not seen a monthly sales volume breaking the 5,000 barrier since May 2008. All of these indicators could foretell the fact that in volume terms we have found the bottom of the market.

As to property prices, well the commentary from Barfoot & Thompson says it all in the detail – the high end properties had a good month with 53.7% of the sales over $500,000 and 30 sales over $1m as compared to just 15 in January. The key issue is that using an average selling price as an indicator on such low sales volumes does naturally lead to the potential of an average price out of line with current trends.

The graph below illustrates this well in that the red line which shows the tracking of year on year price from Barfoot & Thompson data clearly can be interpreted as liken to having hit a rock in the road and veered off its normal trajectory.

Auckland average property prices for Feb 2009 from Barfoot & Thompson


Emerging concern over supply of new homes as consents plummet

The economic slowdown is firmly applying the brakes to the broad property market with the latest stats of building consents mirroring the record lows experienced in the real estate market.

The January stats show just 812 consented dwellings – the lowest since record began 34 years ago, with real estate sales in January at 3,706 the lowest since the early 90’s.

Whilst the median price for property is declining it is interesting to see that the average price of residential construction is actually increasing. Over the 9 month period from May 2008 to January 2009 the average value of residential consents rose from $310,000 to $393,000. Seen on this graph below the average value of consented residential construction on a 3 month moving average (red line) has now intersected with the average sales price of residential property again measured on a 3 month moving average basis (blue line).

NZ new home consents and property sales at Jan 09

This intersection is the first since early 2002 and highlights a couple of interesting trends.

  1. The very low level of new consents contain virtually no apartment developments so prevalent through the past decade which held consent values down.
  2. The market for new builds is maintained through more top end custom designed properties which is spiking the average, albeit from a low base of number of consents.

A consequence of this as highlight in the NBR is the very real possibility that such a drastic cut in new builds especially at the bottom end of the market generally serviced by group home builders could lead to a very real shortage of property with consequential impact on the supply side of the market.

And just before the howls begin from those that think we don’t need any more houses as the plane queue up to take kiwi’s to Australia it is worth reviewing the latest report from Statistics NZ which shows that despite the net record exodus to Australia of 35,400 in the 12 months to January 2009, the overall net migration was positive to the tune of 4,500 in the past year.


The right time to buy a house ? – that is an individual decision, but people are looking

Posted on: February 26th, 2009 | Filed in Media commmentary, Website searching

nz-herald-front-page-26-febThe headlines of the papers are again flashing lights on the housing market – only a week ago we had “frightening rise in mortgagee sales” and today “ Expert’s tip – Now’s the time to buy a house“.

This latter quote not from a real estate professional but from the chief economist of the BNZ Tony Alexander. His view is that if you feel that you have security of employment then now represents a good time to buy a house – especially if you can secure that mortgage at a rate below 6%, ideally around 5.5% fixed for 5 years which based on historical trends would be an excellent rate.

The article naturally provides insight from sections of the industry and regular commentators, all of whom provide insight but not a lot of facts. With the exception of Barfoot & Thompson who report a record week of sales for last week at 241 – the highest level since November 2007, which coincidentally was the market peak of prices when median price hit $352,000.

It will take another couple of weeks until the REINZ monthly sales stats show the state of the market and whether the sales will reach anything close to the Feb 08 figure of 6,356, certainly a long way from the January 2009 sales of 3,706.

In the meantime a key lead indicator of the market can be seen by the scale of online searching for property. This research is now fairly stable as online searching is now the first point of entry into the market for most property hunters. Tracked on a weekly basis over the past 3 years the statistics from Nielsen Online show a very active start to the New Year.

The graph below tracks all property listing websites, this includes the major property portals of and trade me property as well as the leading 6 real estate company websites as well as open2view. The data is presented on an index basis to provide a realistic year on year comparison.

NZ online traffic to real estate websites Jan Feb 2009The blue line shows for the first 8 weeks of this year that having awakened from a traditionally quiet period around Christmas. Activity of searching for property climbed well past the early peak of last year and is now at an index of 120 as yet not showing the traditional plateauing of activity witnessed in 2007 and 2008. In fact the week just ended (16 – 22 Feb) saw an all time high of activity – 1,096,703 individual sessions viewing property online in the week.

The comparison on a week by week basis for the past 8 weeks is shown in absolute terms in the bar graph below – this clearly shows the activity level in February has been spurred on – likely as not by the interest rate reductions.

NZ online real estate traffic Jan Feb 2009These graphs and statistics are no guarantee of future sales, but demand has to start somewhere and potentially these stats could be a lead indicator. Certainly the circumstances a year ago when negative consumer sentiment impacted online searching in late February certainly impacted sales later in the year – as ever time will tell.


Headlines can be misleading – especially when it comes to economic forecasts

Posted on: February 23rd, 2009 | Filed in Media commmentary

istock_000003907033xsmallThe newspapers and TV were again full of the headlines this morning of the forecast rise in unemployment to 11.2% coupled with house price falls of 35% – how bad could it get??

The repercussions of these headlines spread far and wide through the economy and the ripples have sometimes unexpected consequences – let me explain.

The fact is that in this case the headlines are attention grabbing and don’t truly represent the report from which they are quoted. It is good that the web provides a balanced reporting environment with the benefit of greater independence in reporting provided by the likes of Bernard Hickey on amongst others to provide context to this report by the New Zealand Institute.

If you read the report you find that these forecasts are not the opinion of the NZ Institute at all they are part of a US research into the trends from an aggregation of a number of recessions over the past century and to quote the very short piece from the research:

The eminent American economist Kenneth Rogoff and co-author Carmen Reinhart released research showing that recessions originating in financial crises such as the current global recession are generally protracted affairs associated with profound declines in output and employment. On average, real house prices decline 35 percent stretched out over six years, while the downturn in equity markets lasts for at least three and a half years. Unemployment rises, on average, by seven percentage points.

The Institute then go on to say :

Applied to the New Zealand context, for example, this points to a worrying possibility that unemployment could rise from a historical low of 4.2% to a rate of 11.2% over the next two years – a rate exceeding the most pessimistic forecasts at the present time. This simple extrapolation may be misleading, however.

It is an 11 page report and this is the only reference to this figure. Overall the report which the mainstream media have latched onto was not (despite how they may have constructed it) a report on the likely future rate of unemployment, it was a detailed analysis of the credit issues for funding NZ in the future and provides some detailed proposals.

There are a ready army of doomsday merchants out there who love to have us believe the end of the word is nigh! – the fact is economic forecasting in today’s uncertain times is very difficult, however the important thing to bear in mind is that the developed world still wants to retain living standards and the developing world wants to aspire to attain such living standards – that should be (and hopefully will be) sufficient for the global powerhouse economies to fix the issues and restore some confidence and stability in the banking system.

The problem is that the average person in the street does not have the time or inclination to read such reports, preferring to graze on a diet of TV news and newspaper headlines – no problem with that except when the headlines impact the decisions they make and the lives of other people they impact.

Likely as a result of these headlines another property sale has fallen over. Speaking to a real estate agent today he recounted this story:

On the ZB news at 7am this morning the first few items that Kiwis hear while they are driving to work – unemployment may exceed 11% and house prices are more likely to drop 35%.

Got an offer late yesterday, been working it with small gap to close, then this morning buyer calls to say no we will leave it and wait a bit longer. I say what if they will take your last offer – he says nah – withdraw it! – makes you wonder if he had his radio on!

So another sale falls through, another vendor has to go through the whole sale process again and an agent has to start the whole marketing process again – for him no likely earnings for this next few weeks. The ripples from the headlines spread far and wide.

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