Stefan shares his thoughts on the Australian and NZ market

Following the very successful visit of Stefan Swanepoel last month, from which we have received excellent feedback. It is very interesting to read this post by Stefan to his US community regarding his observations on the real estate market in NZ and Australia.

Real Estate News from New Zealand and Australia

By Stefan Swanepoel
This week I am in New Zealand and Australia giving talks in both Auckland and Brisbane to various different local real estate technology companies, a leading real estate brokerage and a large real estate association.

Similar to our real estate market their market also experienced a strong surge in property prices during the period from 2002 to 2007 but, although not caught in the subprime mess of the USA, they could not escape the resulting global hangover. That coupled with the rising price of oil and “Downunder” is also feeling the pain of a poor real estate market. Their market is currently experiencing a significant and dramatic decline in sales with March numbers down approximately 50% in New Zealand.

As Australia is much larger in size and thus more diverse, the declines vary depending on the state. The overall market is definitely slowing to the same extent as New Zealand – the following provides you a snap shot of what’s happening:

  • Queensland – sales numbers down 30%
  • New South Wales – slow, no real change the last 18-24 months
  • Victoria – sales numbers down 25%
  • South Australia – sales numbers up 20%
  • Tasmania – sales numbers down 15%
  • Western Australia – sales numbers down 50%

Similar to the initial stages we experienced in the U.S., the pressure is on prices to decline but many sellers are still holding out, so no major reductions; yet. Although not significant, nor expected to become as significant as in the U.S., foreclosures are also slowly on the rise. As is the case here, the general mood in New Zealand and Australia is fairly gloomy.

What is interesting is that the utilization of the Web by the public in Australia and New Zealand is amongst the highest in the developed world. It’s this global down market phenomenon and the surging usage of the web that is going to be the catalyst to re-engineer the real estate brokerage industry.

For those who have not been “Downunder” – neither country has a MLS (multiple listing system) so the influence of the web and its use for the marketing of houses, has a different dynamic than in the U.S. Both countries however do have a powerful, national real estate portal that is focussed and drives significant traffic to their websites and basically functions as a national MLS. The two sites also have similar names although owned by different entities: in New Zealand and in Australia

Watch these two countries carefully, as in some cases they may actually leap-frog the U.S. and lead the way with respect to web-based real estate innovation.

August 05 2008 08:51 am | Uncategorized

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