Today was the start of a new regular slot on TV3 Business Breakfast for providing a mid month view of the property market. For those readers who were not up at 6.40am you can view the segment here on the TV3 website.
The key data presented in the report covers the latest Real Estate Institute sales figures for January as well as latest data on website listings.
Sales
The sales in January were very low. Just 3,666 properties were sold in the month. These sales were lower than many had anticipated, especially when compared to a year ago – a time you have to remember when the storm clouds of the recession were depressing all forms of consumer activity and confidence – in that month a year ago 3,706 properties were sold. So this placed January 2010 as the lowest month going back as far as 1992.
The chart below tracks the past 5 years and uses seasonally adjusted monthly sales data. The key periods of the past 5 years are highlighted to track the key events – STRONG MARKET 2005 – mid 2007, MARKET FALL mid 2007 – early 2008, FLAT MARKET in 2008, RESURGENCE AND FALL in 2009.
On a seasonally adjusted basis the January 2010 sales volumes were not quite the lowest month, but they came pretty close.
Sales Price
The Stratified median sales price for January as reported by the Real Estate Institute in association with the Reserve Bank showed a further fall to a level of $360,687. Down from $366,500 in December which itself was a fall from November. The stratified median price as shown in the chart below is still some 5.3% below the market peak last seen in November 2007. The resurgence of houses prices seen through 2009 when the price came within 2% of the peak has certainly lost steam – certainly low sales volumes has the ability to apply a downward pressure on prices.
Listings
The most recent NZ Property Report for January highlighted the rise in the inventory of unsold houses from 34 weeks in December to 40 weeks in January. With this latest set of data reporting a further slowing of sales volumes added top which is a strong flow of new listings; that level of unsold inventory will likely rise again significantly for the February report – I suspect we will see a level around 48 weeks.
Taking the latest pulse of the market looking at the flow of new listings coming onto the market – the fact is that February is going to be the month which a lot of people have been expecting for a while – 18 days into this short month we have already seen over 9,500 new properties hit the market. To put this in context last February saw 12,164 new listings – we are seeing a daily rate of close to 700 and with 7 more business days we could see over 14,500 for the month.
The NZ Property Report for February will be published on Monday the 1st March on this site and will provide a national as well as regional view of the property market as seen from the perspective of new listings, asking price expectation and inventory of unsold houses.
Yes exactly what I have been reporting on in the Hamilton market for 5 months now – see blog for details http://unconditional.co.nz/greigs/2009/09/
I do think a combination of tax talk from ‘John’ and his friends and a unemployment rate (7.3%) higher than ‘Bill’ thought sucked the confidence out of the market. We are seeing lots of people looking in Hamilton just that nobody is committing.
I am reminded on the comment of the Inman conference – ‘ this is the market place now get used to it, and if your business model is built on the sales numbers of yesterday – be very scared.
Greig
Great to get your local perspective as someone who is in the market everyday and can see it emerging day by day. There is uncertainty and this is holding back sales. A tough market especially as it looks like February will be a bog month for new listings.
Can’t belive that the last update to this site was FEBRUARY ?????
Anyone notice we just had a Budget? And which directly affects the property market???
Hello!
OK, well we’ve had the Budget. BIG DEAL! All those doomsayers were proved wrong yet again.
Mind you, the likes of Keiren Trass are back out there again predicting huge falls in property values.
Remember his prediction in 2007 that prices in 2008 would, ” . . . drop by 30% or even more” WRONG – they dropped by only -7.1%!!
In 2009 the Auckland market values GREW again by +9.8%.
Now he’s predicting a fall of 10% following the Budget affecting the depreciation allowance on investment property – HE’LL BE WRONG AGAIN, MARK MY WORDS.
Why? Because we have critical and growing shortage of residential rental stock.
Mind you, he’ll have his adverts out soon, promoting probably another book on what to do in a falling property market, followed by expensive seminars, etc etc.
And what of those other self-appointed “experts’ Bernard Hickey & Mary Holm – they just LOVE to slag off the property market.
All three earn their livings by trying to drag down the one investment asset class that has consistently produced excellent long-term returns to investors, i.e the Property Market.
I have yet to see a constructive, positive suggestion from Mr Hickey, in any of the media.
Ms. Holm is a great commentator on what has already happened [duh! brilliant stuff!!]
We have a very robust property market, completely separate and different dynamically and economically from the USA, Europe, even Australia, so PLEASE, stop comparing apples with tomatoes and do your homework based on historical FACTS, not hysterical rumour, doomsaying and supposition.
PROPERTY HAS OUTLASTED EVERY COMPANY ON THE SHARE MARKET, EVERY FINANCE COMPANY, EVERY BANK, EVERY AND ANY OTHER FORM OF INVESTMENT!
PROPERTY INVESTMENT IS HERE TO STAY!
Eddie
This Property Pulse section/ feature was established to mirror the monthly slot on TV3 Business Breakfast – however that folded as TV3 breakfast folded and therefore – no updates – sorry. However this blog does comment on key statistics regularly – generally 3 times a month.
As to your comments on property investment, I am not setting myself up to be, nor is this blog intended to be a promoter or detractor of property investment. It seeks to shine a light on market trends and key issues surrounding the property market. It is certainly an open and diverse platform for comments surrounding the property market, something I trust you agree with – if you don’t them please let me know.