Descriptions of the New Zealand real estate market having a mini-boom are absolute rubbish, according to First National in their media statement released on the 15th November 2009.
Real Estate Institute statistics out this week show the national median price hit $355,000, a 10-year high. Bank economists are warning of measures needing to be taken against another housing boom and some commentators are saying it’s a “sellers market.”
First National general manager John Stewart says, “There is no boom and talk of a sellers market is rubbish. There are a few well presented houses in each market sector, suburb and price bracket that people are fighting over but there are fewer houses selling overall. Those not winning the battle for these prime properties are sitting back and waiting for the next “cherry” to pick whereas during boom times they rush off and buy the next best. In our experience, and while there is regional variation, most homes are still selling at 10 – 15% less than two years ago and that is not changing as quickly as some commentators have been saying in recent days”.
“Perhaps the bank economists are trying to justify interest rate increases.”
“It concerns me that at a time when a new Real Estate Agents Act is about to take precedence, with the driving intent of professionalising the industry, that we are seeing such emotional and ill-informed commentary from supposedly responsible bodies”, Stewart added.
“To base a view that real estate is in a “boom” cycle and needs reigning in on such low sales volume and around the results of competition for the precious few well priced and presented properties in each market is unprofessional. Volumes had not recovered to boom status either“, he said.
“Comparing six-monthly averages, First National’s volumes have plateaued at 40% below the peak of 2007, although they are 21% higher than the lows of last year’s slump.
People are blaming lack of listings for limiting sales but in areas where listings have improved, sales volumes have not always followed indicating many buyers are still wary of committing themselves.
Houses under $400,000 made up the bulk of sales activity and it was of concern that volumes in this section of the market were in many areas dropping.
With Christmas traditionally a quiet time for the property market, vendors holding firm to unreasonably high prices would be disappointed”, Mr Stewart said
Rental demand has increased over the past three months
with both vacancy rates and rent drops decreasing
First National Group’s quarterly property management survey of its network offices across NZ shows vacancy rates have decreased from an average of 6.3% to 4.9% in the past three months.
First National Group General Manager John Stewart said many people looking to buy were now renting longer, some being apprehensive about taking out loans and job stability. Additionally, some landlords had retrenched, down-sold properties and moved into houses they previously rented out, resulting in displaced tenants seeking new homes.
58% of offices reported rents being static but 32% reported rent increases, varying in amount between 1% to 20%. The most notable average increase was in Taranaki where rents for properties around Stratford have gone up an average of 15% in the past 3 months.
However, business closures, for example Bridgestone Tyres in Christchurch, would continue to affect house sales, causing unemployed people on one hand to sell or need to move to seek a new job and creating rental vacancies as tenants move on.
• Oversupply of 2brm properties was reported in Rotorua, Manawatu, Johnsonville, Cromwell and Coromandel.
• Shortages of 3brm properties was reported in Waiheke Is, Hawera, New Plymouth, Coromandel and Richmond.
• A severe undersupply of 1brm properties was reported in Papakura and Whangarei.
• Tough economic times causing people to downgrade their rental was cited by areas including Rotorua, Taranaki and Whangarei.
About First National
Established in New Zealand since 1985, First National has become the first stop for tens of thousands of property buyers and sellers throughout the country.
From Kaitaia in the north to Riverton in the south, First National Real Estate has the country covered! Each is independently owned and operated, just like their counterparts in Australia, where First National Real Estate is the largest real estate organisation of them all.
Essentially, we are a co-operative – a business and social network of successful, like-minded people who are good at what we do. While most property sales are local, our members benefit from a comprehensive referral network, not only throughout New Zealand and Australia, but also in Singapore, the United States and Canada.
Our members enjoy the sense of camaraderie that exists within the group nationwide and take great pride in flying the First National Real Estate flag.
November 16 2009 | General Real Estate | No Comments »
An easing of listing shortages and green shoots in the mid priced residential market punctuated a relatively quiet August, First National Group’s monthly survey shows.
The real estate co-operative’s nationwide office survey measures key activity indicators including number of listings, website property views, open home attendance, buyer enquiry and number of contracts signed.
Listings shortages are still severe in some Auckland suburbs, Nelson and Taranaki but are easing overall, with 38% of offices reporting shortages compared with 51% in July and 57% in June.
For the first time in a year, signs of life appeared in mid priced properties ($300 – $400,000) with 13% reporting higher activity than usual for this time of year.
Activity at the lower priced end of the residential market (under $250,000) which has dominated the market in the past three months continued strongly but was less marked as activity increased across the board.
However, demand for higher priced property (over $600,000) continued to dawdle, on par with the previous two months.
First National General Manager John Stewart commented on record levels of enquiry on websites, saying it indicated people were planning. However, the lack of listings was still making it difficult to meet buyer demand.
“Conjecture that lack of stock will drive up prices is just that. Good properties always sell well and often above expectation”, he added.
“First National notes that section sales are strong in Canterbury, Nelson, Marlborough, Wanaka and showing a lift in the Coromandel Peninsular also.
“Section sales always drop early in a contraction but come away early too, and the recent lift in housing consents reflects this.”
Another strong trend noticed by First National has been the growing enquiry and purchases by UK buyers, Stewart said.
Numbers of contracts signed overall in August were slightly down on July but within normal range for the time of year, he added.
First National website
September 11 2009 | General Real Estate | 1 Comment »
July 22nd 2009
First National manages around 6500 rental properties in New Zealand.
First National’s quarterly property managers survey last week showed typical winter rental market conditions are exacerbated this year by the economic downturn.
First National Group General Manager John Stewart said “apart from a few pockets around the country, supply continued to outstrip demand providing plenty of choice for tenants. Some areas have double the usual rental supply although a general shortage of quality rental property was noted”.
“Property managers are reporting more tenants downsizing, reducing work travel distances or moving into shared accommodation due to tight economic conditions.
“Demand for lower end properties is helping stabilise rents but we are seeing new tenancy reductions of up to $50 per week for higher end properties in some areas including Auckland, Coromandel, the Bay of Plenty and Christchurch,” Mr Stewart said.
Places most difficult to get tenants in the past three months were Waiheke Island (vacancy rate of 21%) followed by Ashburton (vacancy of 18%) and Whangamata (vacancy of 14%).
Corresponding rent reductions for new tenancies in these places were up to 7.5% 10% per week.
Tenant demand was strongest on the West Coast (vacancy rate just 0.5%), Taupo (3% vacancy), Taranaki (3.6% vacancy).
Rents over the past quarter increased on the West Coast (portfolio rents up 8.3% from average $210.70pw to $243.64pw) and Hawera (average 4% increase for a 3brm property), with rents in Taupo stable.
As usual in winter, colder and older homes were difficult to fill, with warmer, drier properties being let quickly.
Mr Stewart said economic conditions meant unless they were downsizing or relocating for a job, people were choosing to sit tight rather than incur additional costs associated with moving.
“A number of metropolitan offices report increasing numbers of tenants calling in to announce they have lost their jobs and cannot not pay rent for a week or two.
“Of anecdotal interest is the appearance of University and Polytech-tenanted properties falling vacant at the end of the first semester recently and not being picked up for the new term. Perhaps more students are either ceasing their studies or moving home to Mum and Dad,” Stewart added.
“Landlords are taking comfort with low interest rates and less expensive acquisitions. However, with a shortage of listings and a supply of buyers, landlords might do well to consider selling as first home purchasers continue to dominate real estate activity.”
Summary by region:
Northland – Increasing residential vacancy rates over past three months to 8.6%. Rents down by average of 1.6%.
Auckland – Static or increasing residential vacancy rates, currently over 9% average. Rents down an average of 5%.
Central North Island (Bay of Plenty, Rotorua, Taupo) – Higher than usual vacancy rates in Bay of Plenty and Rotorua but short term work projects keeping Taupo rental market stable.
Lower North Island ( Taranaki, northern Wellington, Manawatu) – Vacancy rates reducing, rents stable with the occasional increase.
Upper South Island (Nelson, Blenheim) – Rent drops of $10 -$40 pw.
Christchurch – Has double the usual number of rentals available (more than 1600 currently advertised on TradeMe). Rents are dropping by average of 5%.
West Coast – Lowest vacancy rate at 0.05%, portfolio rents increased over 8%.
Lower South Island (Alexandra, Invercargill): Rents are stable. Invercargill still has the cheapest city rents (averaging $200pw for a 3brm house) which have remained stable over the past quarter.
Info gleaned from the latest First National media release
July 23 2009 | General Real Estate and Investing | No Comments »