How relevant is the CV of a property?

by Alistair Helm in


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The government valuation of a property, otherwise known as the rateable value or sometimes known as the CV in the case of Auckland, is the automated process whereby a value is applied to every address (comprising a land value and an improvement value) in an effort to fairly apportion local government rates. Like it, or hate it, rates needs to be levied on property / land owners and the method most commonly used is apportionment based on value.

As to the value or relevancy of this automated valuation in relation to the market price of property for sale, that is a subjective debate. Especially nowadays given the freely available automated valuations from the likes of Homes, Trade Me Property Insights and MyValocity. These valuation assessments are updated at least monthly whereas the process to establish rateable value is only undertaken on a 3 year cycle.

That being the case you would assume that the notion of a rateable value had become somewhat obsolete, relegated to the museum, much like Imperial measurements. That’s far from the case as the media is awash with references to RV / CV and no conversation with prospective buyers at open homes is complete with the question as to the property’s current CV.

The fact is that whilst recognised as being out of date as soon as it is published, the CV / RV of a property is a benchmark, and one anointed with the officialdom of local government which is why it perpetuates.


So now to some interesting analysis. In years gone by and especially in the most recent property boom of 2011 to 2016 and most especially in Auckland, the question has always been how much over CV were properties selling for? Was it 30% … 40% … or even 50%, such had been the accelerated inflation in property prices over the course of just a few years.

The fact is that by the time of the 2017 re-valuation process, Auckland CV’s generally were out of touch with sales prices by as much as 48%. That comparison to the CV by the time of the re-valuation was also the same during the prior period of 2011 to 2014.

The chart below tracks the median sale price in Auckland during the elapsed months from the re-valuation tracking the 2008, 2011 and 2014 re-valuations. The 2008 revaluation which is tracked in the chart from 2009 onward (as new CV’s are published in November) was noteworthy for the completely flat market during and immediately post GFC.


Now, if we add in the data for the past 18 months since the new CV’s were published at the end of 2017, the picture is revealing. At May of this year with the latest data from the Real Estate Institute we see that the median sales price of property in Auckland is running at a 5% drop compared to CV and heading on a trajectory that is well below the post GFC period of 2009 to 2011.

The question will soon be asked as to the re-valuation due to be undertaken a year from now in Auckland as to whether the re-evaluated CV’s might be lower than the 2017 figures. That would come as a shock to many, I suspect.


Is it better to rent or to buy?

by Alistair Helm in


Photo by   Pixabay   from   Pexels

Photo by Pixabay from Pexels

This is a simple question, but unfortunately it does not have a simple answer.

I was prompted to try and answer the question when I was contacted Susan Edmunds a journalist working with Stuff. I personally love to be asked these type of questions as they prompt me to delve into the data and seek out trends and insights.

The reality is .. it depends. It depends where you live, if you have a deposit, if you intend to live in the property for any length of time, how much you want to do to maintain the property, if you care about what place you live in, and so on. The provisos are endless and that is partly why there is no simple answer.

However you can apply a simple logic to the available data on sales prices and rents to at least provide an insight and that is what I have set out to do.

The approach I have taken is to keep it as simple as possible. I’ve posed the question, for a particular region of the country how much would you have paid in annual rent for the typical average property at a certain time over the past 19 years, and compared that with the pure cost of interest for a 2 year fixed term mortgage based on the median sales price for a typical property in the area at that same time. I have made a consistent assumption that the cost of buying the typical property would be with a 20% deposit. Sure this decreases the interest costs but as I have said I have tried to take a purely hypothetical and simple approach. I’ve then expressed this rental cost as a percentage of the mortgage cost. If the rent is less than the mortgage cost then it’s cheaper to rent and visa versa.

As a reference to the source of data. I have used the median sale price of all properties each month in each region based on the sales data from the Real Estate Institute of NZ. I’ve then applied the 2 year fixed interest mortgage rate from the Reserve Bank of NZ data, and I’ve used the Ministry of Business, Innovation & Employment who track the weekly rent based on bond data.

I know this methodology is way too simplistic, there are far more accurate calculations that would factor in the interest earned on the same deposit if you chose to rent, naturally also the value of any capital appreciation matched to maintenance and enhancement costs. Then there is the disturbance factor allied to the uncertainty of tenure of rent. I’ve also used large aggregated data sets whereas in a suburb the specifics of buying a 2 bedroom house as compared to renting a 2 bedroom house may well be massively different to the typical house within a city or region. As I say there are as many different ways to calculate this decision as there are rental properties.

Detailed below are the analysis of 13 regions of the country, all spanning the period from 2000 to 2019. The results are in someways surprising (I am not sure quite what I expected to find) and certainly interesting.


Northland

Starting at the top of the North Island with Northland the situation in April 2019 is that it is 4% cheaper to buy than to rent. The currently weekly rent is $388. The total rental cost per year then is $20,176 this compares to the current mortgage at 4.8% of a median sale price property of $507,000 equating to an annual interest charge of $19,469 - 4% cheaper to buy than rent.

Over the past 19 years the situation has certainly changed with the period from 2003 through to 2012 favouring renting, however since then the cheaper option has been to buy.


Auckland

It probably comes as no great surprise that the Auckland market favours renting. At this time it’s 11% cheaper to rent than to buy, with the median weekly rent at $561 equating to an annual rental cost of $29,172 vs. the interest component of the mortgage for a median sale priced property of $850,000 equating to $32,640.


Waikato

The Waikato region is currently hovering around the mid-point indicating that it’s a tough call based on the median weekly rent of $401 equating to an annual rental cost of $20,852 vs the mortgage interest cost on the median house price in April of $550,000 resulting in an interest cost of $21,120.


Bay of Plenty

Whilst the past 3 years has seen it cheaper to rent than to buy in the Bay of Plenty the last few months has seen this bias to renting decline as house prices hav plateaued and rents have continued to edge up. In April the median weekly rent of $440 equating to an annual rental cost of $22,880 vs the mortgage interest cost on the median house price in April of $600,000 resulting in an interest cost of $23,040.


Hawkes Bay

The Hawkes Bay region is pretty consistent in its data showing that it is cheaper to buy than to rent. This has been the situation for most of this century with only the period in the early years of the 2000’s when house prices rose on the back of relatively high interest rates. Since the GFC the low interest rates have favoured buying.

In April the median weekly rent of $399 equating to an annual rental cost of $20,748 vs the mortgage interest cost on the median house price in April of $465,000 resulting in an interest cost of $17,856, making it 16% cheaper to buy than to rent.


Taranaki

As of the data for April it is 21% cheaper to buy in the Taranaki region than to rent and this bias to buying over renting based on this simple method of calculation has predominated for most of the past two decades.

In April the median weekly rent of $344 equating to an annual rental cost of $17,888 vs the mortgage interest cost on the median house price in April of $385,000 resulting in an interest cost of $14,784.


Manawatu / Wanganui

For most of the past decade, post the GFC the benefits of buying over renting have been in then order of a 20% difference, at one time around 2015 it was a 50% cheaper option to buy than to rent.

In April the median weekly rent of $320 equating to an annual rental cost of $16,640 vs the mortgage interest cost on the median house price in April of $360,000 resulting in an interest cost of $13,824.


Wellington

There had to be one region of the country that was unequivocally in favour of renting and that is Wellington. Aside from literally one month in March 2016 before property prices started to rise significantly it was 2% cheaper to buy than rent. Today in April 2019 it is 3% cheaper to rent than to buy. This seems to fly in the face of the often reported state of the rental market in the Capital where demand always seem to outpace supply.

In April the median weekly rent of $529 equating to an annual rental cost of $27,508 vs the mortgage interest cost on the median house price in April of $737,500 resulting in an interest cost of $28,320.

As a slight side note the data set used for Wellington covers the wider Wellington region including the Hutt Valley and Kapati Coast and here would be a case of using a tighter geographical data set may well change the outcome for the decision.


Nelson

At this time the data shows that in Nelson there is no difference between renting or buying. Since 2016 the trend has been moving in favour of renting, however the majority of the past decade has been fairly well balanced between renting and buying.

In April the median weekly rent of $396 equating to an annual rental cost of $20,592 vs the mortgage interest cost on the median house price in April of $540,000 resulting in an interest cost of $20,736.


Marlborough

In contrast to its neighbouring region, Marlborough region clearly from the data shows it is cheaper to buy than to rent and has been the case for the vast majority of this decade. At this time it is 24% cheaper to buy in Marlborough based on median rent and median sale price.

In April the median weekly rent of $390 equating to an annual rental cost of $20,280 vs the mortgage interest cost on the median house price in April of $427,500 resulting in an interest cost of $16,416.


Canterbury

At this point in time based on April data it is 17% cheaper to buy in Canterbury than to rent. The median weekly rent of $396 equating to an annual rental cost of $20,592 vs the mortgage interest cost on the median house price in April of $460,000 resulting in an interest cost of $17,664.

Again as stated in reference to Wellington the Canterbury region is large and diverse and not wholly representative of say the Christchurch city or specific suburbs, this is where the data across a whole region can only provide an insight not the basis for a specific decision as to buying or renting.


Otago

Since 2011 the data clearly shows that the cheaper option across the Otago region is to buy rather than rent with the April data showing a 30% benefit.

In April the median weekly rent of $443 equating to an annual rental cost of $23,036 vs the mortgage interest cost on the median house price in April of $463,000 resulting in an interest cost of $17,779.


Southland

Outside of a short period running up to the GFC when interest rates rose the data clearly shows that the cheaper option across the Southland region is to buy rather than rent with the April data showing a 28% benefit.

In April the median weekly rent of $283 equating to an annual rental cost of $14,716 vs the mortgage interest cost on the median house price in April of $300,000 resulting in an interest cost of $11,520.


Leveraging digital property data to enhance the role of an agent

by Alistair Helm in ,


Photo by  Lukas  from  Pexels

Photo by Lukas from Pexels

Things have become busier over the last month or so in my role as a real estate agent. I’ve started to leverage the extensive property database I created 18 months ago which tracks all property activity in my target market of Devonport, providing me with unique insight and perspective on market trends and buyer behaviour online.

In addition, I’ve found real value in the data reports for the various listings I have worked on. This has been hugely satisfying both from a personal engagement perspective, working with buyers and sellers; but also allowing me to deep dive into the data to surface valuable insights that have given me the opportunity to demonstrate a new level of professional engagement with sellers and buyers. This I believe is the point of difference I want to establish and leverage.

When it comes to data reporting, there is really only one reliable and meaningful source, and that’s Trade Me. Realestate.co.nz does provide a weekly listing report on page views. However it’s not customisable and limited in data content and analysis. OneRoof has an excellent platform in their agent portal OneRoof Advantage, however as yet the data is not of value due to insufficient traffic to individual listings. Trade Me has OneHub; an excellent resource offering an agent facing portal for profile marketing and unique data analysis and reporting of listings.


This is where I feel I need to make an appropriate disclosure. I was an employee of Trade Me Property from 2014 to 2017, in that time as Head of Product I was responsible for the development and launch of OneHub, the agent portal provided by Trade Me. I ‘m proud of this product and the team that built it, however in the past few months I have become even more enamoured with it in a way I probably didn’t anticipate. I’ve started evangelising about it among my colleagues. So, this is in a small preamble to set the context in what I want to share. To be completely clear I am not in any way incentivised by Trade Me to write this article. I do though, maintain good alumni contact with people at Trade Me. That’s got the disclaimer out of the way.


OneHub provides at this time two primary products that are free to all agents. First, is an agent profile which allows any agent to build and manage their own profile with its unique page on Trade Me, as well as being featured in the search directory for agents. This is an invaluable profile opportunity for all agents. The Trade Me digital platform is massive and from a search optimisation perspective it’s gold. In my opinion all agents would be mad not to build a profile on Trade Me.

Second, is the ability to create customised marketing reports for all your listings. Sounds good, but the question I often get asked is “but so does Realestate.co.nz” and now OneRoof, or the page view stats get imported into my office system. Yes, but the key word here is ‘custom’ and the added fact that OneHub reports are insightful when you dig into them. Really insightful, and if presented in the right way in my view offer an excellent means to enhance the reputation of the presenter.


I think it is worthwhile to recap on the unique value of these reports.

1. Custom time period – OneHub reports can be created at any time based on any time period. The last 7 days / the last month / the first weekend / the full period of the listing. Any date range can be chosen. Each custom report is created as a downloadable pdf. The report details the daily activity of page views, as well as the number of Trade Me members who have added the property to their watchlist. Additionally, it shows the number of click-to-reveal telephone number reveals on the listing page and the number of email enquiries sent to the agent. Such insight is far more valuable than the competition, especially given the scale of the audience on Trade Me – by reference in my area of the country, Trade Me attracts around 3 times the page views of Realestate.co.nz and 7 times the traffic of OneRoof (the latter is based on a very small sample of monitored properties as the site does not publicly detail page views on listing pages).



2. Insight of watchlisters – OneHub reports track not just page views but also the number of members of Trade Me that save the property to their watchlist. This stat is a critical measure of engagement. Sure, the reason for people saving a property to a watchlist can be varied from the most logical – they want to see this house and may be buy it, to design junkies and also let’s not forget the smart agents who watchlist their own listings and competitive listings in their area. However, whilst the absolute scale may not completely reflect the true level of buyer interest, the relative scale will. If a property has 105 watchers after 3 weeks and another property has 40 then there is an inference of greater engagement as a surrogate for ‘interest’ with the first property.
The watchlist data is so important and unique as Trade Me users cannot use the watchlist feature unless they are logged in. The watchlist button is so intuitive for the Trade Me user; whereas for users of other websites saving property requires creating an account – a higher hurdle of engagement.



3. Regional insight – the Onehub reports drill down way deeper than just page views and watchlisters. They are able to detail the aggregated location of where those people live who view or save details on a property. This is invaluable in helping the vendor understand where interest in the property is coming from as a function of the marketing – local interest or out-of-town interest.


Now let me share a couple of examples of how I have used these reports and what I see as the real value.

Scenario 1 – Additional promotional products

The reality of online marketing on property portals is that there is a natural decay of viewing. This is something I have written about over the years. Thankfully all of the main portals offer a product to effectively ‘jump back up the search results’ – the Refresh product from Realestate.co.nz and Boost from Trade Me. Actioned whenever, and repeated as often as needed, this product is well priced to be included in most marketing campaigns.

The power of the product is best showcased when seen in the viewing stats. The product drives incremental traffic and engagement on the day it is actioned and in the subsequent days as the listing profile is enhanced being higher up the search results.

 


Scenario 2 – Event based activity

Recently, as much a function of the more challenging property market, asking prices have been placed on listings, if after the initial auction or tender campaign has failed to uncover that critical unconditional buyer. Such events are so easily judged through the daily traffic to a listing covering both views and watchlist activity. This is so valuable when providing feedback to vendors in regular reports to be able to show the impact of such activity.

As an added benefit Trade Me undertakes email alerts to people who have watchlisted a property which has a price reduction, this again as an event based activity is easily tracked on the custom reports on OneHub.

 


Scenario 3 – Comparative analysis

I’ve benefited recently in assisting with a number of properties on the local market at the same time, through this I’ve been able to provide real insight for vendors to help them appreciate the level of interest and engagement of their property compared to other properties on the market at the same time.

This data engages clients in some encouraging and challenging conversations. It’s great to be able to showcase the scale of audience and level of engagement for a vendor when their property is performing ahead of competition and the market. Equally it’s great to have meaningful conversations where the data is clearly showing that their property is simply not engaging buyers. This is often in my opinion the better conversation as it leads to the question – have we got the right message to the market? Is that message wrapped up in the right price expectation? Have we really demonstrated the best attributes of the property – should we re-promote it and change the headline and photos to shift the focus of the target audience?


This is where I feel most valuable in my role as an agent. Able to use data and insight to assist vendors to really feel a part of the process of marketing. Managing their expectation right through the process even if it means telling them the truth “your property is not attracting buyers.. certainly not at this price expectation!” I fear all too many vendors are sold a marketing campaign and then are left in a state of limbo ‘hoping’ the marketing is working such that on the deadline date the property will be sold. I am not disparaging the work of the thousands of real estate agents out there in the market,

I simply want to showcase how data can be such a valuable tool to really engage with the client in the selling process and ensure that you can show that you used every resource at your disposal to market the property to the best effect. At the end of the day the agent does not decide to sell, only the vendor makes that decision as to whether they are prepared with the offer presented on the day. The agent’s role is to bring these parties together. Bringing buyers and sellers together may be the outcome, but the hard work is targeting and communicating with the buyers and that’s where smart marketing and analysis are proving so powerful, and enhancing credibility.


The Auckland Quarterly Property Review - Q1 2019

by Alistair Helm in


Quarterly Review logo.png

The Auckland property market is exhibiting the classic symptoms of a market uncertain as to its future direction.

The latest 3 months to March, point to a flat market with no perceptible rise in sales activity, with prices edging down. However I believe there is cause to believe that signs of a recovery in the property market may be emerging. The lead-indicator of the clearance rate points to this possible improvement as this year progresses.

Examining the three key data points of sales volume, sales price and clearance rate in more detail should help to explain this summation.


VOLUME SALES

In the first 3 months of 2019 there were a total of just over 5,000 property sales across the Auckland region, this compares to just over 6,000 for the same period last year, as has been the story for the past 2 years as property sales have slowed. What is more significant is the fact that in relative terms the total sales in Auckland in the past year is actually half the actual sales volumes of the mid 90’s and the mid 2000’s. Let me repeat that statistic. Half the sales volumes. The ‘relative terms’ to which I refer is sales per head of population.

In 1996 the population in Auckland was just breaking through the the one million mark, by 2004 it was growing by over 2,000 a month as it reached 1,240,000. Today with that growth rate accelerating, the population of the country’s biggest city stands at 1,657,000.

Back in 1996, the annual sales of property stood at 31,927, this equated to 32 property sales per 1,000 population. By 2004 sales for the 12 months to March of that year was a staggering 40,170, equating to 32.2 property sales per 1,000 population. Now compare that with the latest 12 months to March of this year. With sales of just 24,301 it represents just 14.5 property sales per 1,000 population. Half the relative sales per head of population than those two other periods. This really puts todays Auckland property market into context compared to prior periods.

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In relative terms less transactions in Auckland today than at anytime since the darkest days of the GFC - the result of what?

Certainly market price is a key factor, back in 1996 median sales price was $230,000 and by in 2004 it was $320,000 whereas today it is $850,000. Certainly the appetite from investors has diminished from what would have been the hay-days of 1996 and 2004; and certainly access to funds from banks is far tighter today than in those prior periods, although perversely the interest rates on mortgages has never been lower.

There is simply no getting away from it, property sales in Auckland are not breaking any records any time soon. As the chart shows the variance in monthly sales vs prior year has been consistently negative since November 2015, with the brief exception of the early months of 2017 - all of those comparative gains are now being reversed.

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PRICING

As sales volumes remain flat, so do the sales price. The latest month of March saw a median sale price for Auckland of $850,000. This is $2,000 down on March last year and $30,000 down on March 2017, but is $15,000 up on March 3 years ago - property sales prices in Auckland are flat and losing value to what is benign inflation.

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CLEARANCE RATE

With neither sales volumes nor sale prices showing anything of positive outlook, it’s left to what I judge is a key lead-indicator of the market to point to the future, and the rest of 2019 and into next year. The clearance rate, that being the sales volumes as a percentage of new listings tracked on a 12 month moving basis which is now showing a consistent and healthy increase.

If the clearance rate is edging up then a greater percentage of properties brought onto the market are selling and as the historic chart below shows there is a correlation between clearance rate of sale price. A natural and predictable correlation. If properties are selling faster than the rate of new listings and inventory of new listings is declining, so it speaks to greater demand from buyers which in turn feeds into price inflation; although the lag can be many months.

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The clearance rate in Auckland in the past few months has edged towards 60% which is certainly a healthier rate than this time last year when the rate was bumping around the bottom of the cycle at 53%, certainly a long way from the frothy market levels of 2015 at over 75%, but much healthier than the GFC days of 2008 at just 33%.

As ever property cycles are notoriously hard to predict and are really best viewed through the rear view mirror. Later this year it will be clearer as to whether there has been a recovery beginning or simply another erratic bouncing around with no clear cyclical upturn on the horizon.


Quarterly Property Review for NZ outside of Auckland - Q1 2019

by Alistair Helm in


Quarterly Review logo.png

Whilst Auckland continues to experience a flat property market, the rest of NZ keeps trucking on, although there are signs that the party may now be coming to a close. It’s been a very long party. As the rest of the country has tried to keep up with the Auckland market, the rest of New Zealand has managed to keep going long after Auckland ran out of energy and exited the party.

It’s quite staggering that the median price of properties sold outside of Auckland has been rising consistently for over 7 years straight, that’s 90 consecutive months of price increase. It was back in November 2011 that prices started to edge upward after the GFC and the likelihood that this run will head into its 9th straight year is high.


SALES VOLUME

The last 3 months has seen sales volumes across the country outside of Auckland fall by 6% as compared to the same time last year at just under 13,000 sales. On an annual moving total basis the picture as displayed in the chart below shows that sales volumes are coming off the boil at 54,539.

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Total sales for the month of March at 4,932 was down 11% as compared to March last year and this represents the 4th consecutive month with declining sales volumes compared to prior year. The chart below tracks the cycles of these sales volume movements over the past 20 years. The regularity of the pendulum-like rise and falls is certainly evident. The likely trend in the coming months is for sales volumes to continue to weaken.

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PRICING

The latest median price of property sales outside of Auckland continues to edge ever closer to the half a million dollar mark. Interestingly this half million dollar mark is fair more likely to be broken some time soon, and certainly well ahead of the much anticipated million dollar mark expected to be broken by Auckland two or three years ago but stubbornly failed up until now. In March the medan sale price for properties outside of Auckland was $491,000 up 7% as compared to the same month last year.

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As noted earlier this year-on-year rise follows a consistent increase unbroken over the past 92 months since way back in August 2011 when the median sale price for property outside of Auckland stood at $304,500. That unbroken run has seen median price rise 61%.

Screen Shot 2019-05-06 at 6.50.31 AM.png

CLEARANCE RATE

Just as the latest quarterly report for the Auckland market is showing some signs of recovery when examining the clearance rate, so it is with the rest of the country, except that the trend is the opposite.

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The first 3 months of 2019 has seen the clearance rate (the lead-indicator of sales to listings ratio) begin to fall, having peaked in November last year at 73%. As the correlation between clearance rate and median price movement is fairly close, it is likely that the future increases in median price for property sales outside of Auckland will continue to slow. However given the strength and consistency of the price increases over this extended period it is not likely that actual median prices will fall anytime soon based on historical trend analysis.


Are apartments showing much capital gain?

by Alistair Helm in


Photo by  Francesco Ungaro  from  Pexels

Photo by Francesco Ungaro from Pexels

The NZ apartment market is highly polarised around one city, and one district of that city. I am of course referring to Auckland City. Out of the total of 3,900 apartment sales across the whole country in the past year, more than 2,000 of them were in this tight geographical district.

Apartments, just as with all other segments of the property market have witnessed strong sale price growth over the past few decades. In the past 15 years the median sales price for apartments in Auckland City has risen from $220,000 to $545,000. More than doubling. However, that’s not quite keeping pace with the overall housing sector, and certainly not attaining quite the same capital growth.

An Auckland house bought in 2004 for the median sale price at the time of $342,000 would if sold in December 2018 at the then median sale price of $911,000 have gained $447,692 allowing for inflation. Equating to a 130% return on investment.

An apartment in the Auckland City purchased back in 2004 for the then median price of $220,000 would if sold in December of last year have gained $246,965 allowing for inflation. Equating to a 112% return on investment. A healthy return, off a lower initial investment.

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However as the above chart ably demonstrates such capital gains can be misleading when judging median sales prices over different time periods. For within this 15 year period there were significant periods when the gains were minimal and others where the gains were significant.

The first 7 year period of 2004 to 2011 through the GFC saw median sale price for Auckland City apartments rise and then fall so that the notional capital gain over that specific 7 year period was zero. Similarly though if you bought in 2011 at the then median sales price of $215,000, just 5 years later the median sale price had risen to $575,000, a rise of 167%. However over the most recent 2 years there has seen no rise in median sale price.

In many ways this volatility of capital gain is one of the core variables of the apartment market. It’s a market influenced to a far greater extent by supply and demand factors than the wider property market. Auckland city apartments experience very ‘lumpy’ periods of new supply which through their composition can significantly impacts median sales prices. Additionally such surges in supply naturally effect prices of existing inventory competing in the market at that time.


My interest in this category of apartments was peaked by a note sent to me by Simon Green from Queenstown who when reading my recent article on the comparison between the notional capital gains from Auckland houses as compared to those of Sydney and Melbourne over the past 15 years. He wanted to see how the apartment market was was fairing in those cities and also if I could look into the Queenstown apartment market. I must admit I had not in the past thought to examine this specific market, but questions like this always interest me. So for Simon’s benefit and others here is what I have uncovered.


The analysis of the apartment market comparing Auckland, Sydney and Melbourne is undertaken based on a model developed by Domain Group in Australia, one of the large digital property portals in Australia. Their analysis tracked the notional capital gain (adjusted for inflation) for time periods over the proceeding 15 years, based on the purchase date for an apartment sold in December 2018 at the then median price. So by example for an apartment bought in Sydney in March 2009, after inflation, that property would have netted a notional capital gain over the past 10 years of A$222,735, that would compare with the same time period in Melbourne of A$58,646 and in Auckland NZ$258,601.

The charts below track this 15 year notional capital appreciation of the 3 Australasian cities.

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Directly comparing these 3 cities on a common NZ dollar basis over the 15 years produces this summary of the very different markets.

Auckland Sydney and Melbourne apartments capital gain 2004 to 2018.png

There is without doubt a similar trend albeit with differing scale of capital growth over the 15 year period. It is surprising to me the lower levels of capital growth seen in Melbourne as compared to Sydney and then again the much higher capital growth for the Auckland market of apartments bought in the 2010 to 2013 period vs the current median price.

All markets are though clearly experiencing a recent 3 to 4 year period of negative growth over this near term.


Turning then to the Queenstown market for which I had no real perspective of the scale of the market before diving into the data. What I found was very interesting. Annual sales of apartments in the Queenstown Lakes district have averaged 116 with a peak in 2006 at 260 and a low in 2011 of 72. As far as the notional capital growth for apartments bought over the past 15 years as compared to the current median price the chart presented below is somewhat different to the main Australasian cities.

Queenstown apartments notion capital growth 2004 to 2018png

I recognise I am ill equipped to offer a commentary on this market trend so I take the opportunity to share the perspective of a local expert - Simon Green who furnished me with this response when I posed the question to him to provide background to the data.

“The data does actually make sense to me and I don't think there is necessarily any change in composition. It is a small dataset as the really are only a dozen or so major complexes in town and most of those were sold off plan pre-GFC with the bulk settling 2006-2008 so that part makes sense. There was also a large complex of 89 apartments that settled in 2009 which held pricing up as they had been sold a few years prior at top of market. From there we went into GFC proper - no buyers in market, a large number of mortgagee sales and and other "stressed" sales as income was very low in comparison to purchase prices.

Prices continued to fall for most part through to 2013 and has been recovering well since then due to improved income performance - but equally has been pulled back by a number of complexes now leaking.

Volume of sales remains fairly low compared to '06/'07, but has been due in many ways to owners being happy with their income and not really seeing any better investment opportunities. However, for the past 18 months or so buyer activity has dropped significantly. Prices have softened slightly, but the quality stock should hold its value as there isn't anything for sale and while income will not continue to grow the way it has over past 5-6 years, it shouldn't drop - so value.

So data does seem to reflect the market fairly well.”


The future looks bright for Trade Me Property as it casts a darkening shadow on Realestate.co.nz

by Alistair Helm in ,


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“Someone should never take part in a fight unless they know they will win it”.

This was the opinion voiced in an article by David Hargreaves on Interest.co.nz in February 2014. Over 5 years ago. The article expounded the view that the real estate industry had more to lose than Trade Me, over the then, bust up over increased fees being introduced by Trade Me at the end of 2013.

Five years is a long time in our fast-paced digital world, yet the prophetic view expressed in the article is coming true all these years later, only not quite as imagined. The view then was that the real estate industry’s very business model, could in some way be impacted by the squabble with Trade Me. That has not eventuated. However, the real estate industry has lost in their ability to control the digital marketing platform. A loss far less financially significant, but none the less a squandered opportunity.

I have written at length over the years on what I see as the problems of Realestate.co.nz, and its ever weakening position against Trade Me in the competitive arena of digital marketing, including an impassioned address to the Real Estate Institute AGM last year. Sadly time moves on, and with it, the ever growing strength of Trade Me Property; and for its rival Realestate.co.nz, as the title of this article states, things look bleak.

The half year results of Trade Me published last month stated “The performance of Trade Me Property is exceptional and should continue into the second half of F19”. Not only is it exceptional at $22.3m, it is also sustainable. Trade Me Property in my opinion has found its sweet spot and for now the future looks bright. This result and optimistic outlook are the direct result of two significant successes that have yet to be fully realised. But before I examine these two matters, let’s pause a moment to look at Trade Me Property revenue over the past 4 financial years as reported in financial investor reports.

The most recent 6 months to December 2018 is outstanding, and follows what has been a fairly average performance over the prior years with revenue growth barely hitting double digit percentage growth.

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I am no financial analyst, but I would hazard a guess (as I have done in the above chart) based on my experience and knowledge that the second half of the FY2019 year is likely to see year-on-year growth of 30% resulting in a full year revenue of over $48m, up over 80% on 5 years ago when things went so wrong for Trade Me.

So to what do I ascribe this remarkable performance of Trade Me Property. Firstly a smart and highly successful new product launched last year – Premium Listing.

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This product works exceptionally well, Satisfying the needs of both the vendor and agent. The standout presence of this large listing creates impact in the search results and delivers a markedly high level of page views, not just on web browser pages but also on the Trade Me apps. This is significant, as up until the launch of this product there were no premium listings on either Trade Me Property or Realestate.co.nz that delivered a premium impact on the mobile apps in standard search results. The product design is loved by agents as it incorporates the agent and agency branding to great effect. Priced at a significant premium to the existing offering of Super Feature, the new Premium Listing has achieved a high penetration rate in the key markets of upwards of 15% of listings. This product is likely to benefit from the power of the virtuous circle. Agents love it, they include it in marketing budgets, the results are a delight to agents and vendors, other agents see the power and brand influence and they become adopters and for the buyer searching for property the design is as ever from Trade Me beautiful.

So that is one of the powerful drivers of this new rejuvenated and growing Trade Me Property business. The other is inventory.

I reported back in October last year that Trade Me had then surpassed Realestate.co.nz in terms of total listings of property for sale (including private sales). This was a key milestone as it destroyed the long standing cornerstone of marketing by Realestate.co.nz that they were the leader when it comes to inventory of listings. Subsequent to that turning point Trade Me has powered ahead and as of this month they have surpassed a new milestone.

Trade Me Property now features more property for sale from real estate agents than any other website. This is significant, really significant. Five years ago things went wrong for Trade Me over the price changes and the real estate industry endeavoured to boycott Trade Me. Today more of the industry support Trade Me than support Realestate.co.nz - the property portal that is owned by the industry. The charts below highlight this recovery by Trade Me, firstly for all listings and secondly for agent only listings.

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For Trade Me Property to be displaying significantly more agent listings than Realestate.co.nz on the website today (28,483 vs 26,277), means that real estate agent office are questioning the value of Realestate.co.nz. For the past 5 years the industry has rallied around the industry owned site seeking to consolidate support to make it the critical asset that it had the opportunity to be.

Sadly the industry, whilst well intentioned and principled as a body, is in reality a loose aggregation of over 600 independent business owners and over 15,000 independent contractor-status agents. They all think and act, first and foremost to their own best interest. Trade Me is a marketing tool, just as is the Property Press and the newspaper supplements, as well as Realestate.co.nz and when individual agents select marketing campaigns for their clients’ property what matters most is results. Those results are judged in page views and enquiries, as well as agent profile and presence, and this is where the rubber hits the road. Trade Me is winning this battle and likely to press the advantage even harder in the coming months and years, leaving the events of late 2013 to be a distant memory.


Disclosure: I have over the past 13 years been a senior executive at both Realestate.co.nz and Trade Me Property.

I am not at this time involved in either company through any role or investment. This article, as with other similar articles are written based on published information combined with insight gleaned from studying the property portal marketplace internationally over the years.


Moving house in the digital age

by Alistair Helm in


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I’ve been a casual observer over the past few years of The Internet of Things (IOT). A phrase coined by Kevin Ashton to describe the “interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data”.

I can recall visiting a “smart home of the future” as was described by Microsoft at the time in 2001 in Sydney and being captivated, as many people were by the internet connected fridge. More for the touch screen device on the door (remember this was 6 years before the launch of the iPad).

Such visions of the future as so often happens, take longer to arrive than we imagine. Skip forward nearly 20 years and there are very few touch screens on fridges. However the Internet of Things has slowly permeated our home, from cameras on door bells, to remote device control of our heating and lighting. The fact is, if a device is connected to a power source it could be and maybe connected to the internet, certainly my printer is, and I love the freedom to print wirelessly.

Anyway back to the title of this blog “Moving house in the digital age”. My interest in this subject was piqued by listening to a recent regular podcast favourite of mine “This Week in Google” with the regular co-host Stacey Higginbotham who is an expert on IOT. She got into an interesting discussion of the challenges that are faced by people like her, who live in highly connected houses that are alive with IOT devices, from lighting to door locks, to garage doors, to believe it or not taps an ovens.

Stacey is a real live case of someone who’s moving house and in preparing her home for sale she is somewhat challenged by the myriad of operating systems and instructions that pervade her connected home. How to convey to the new owner the operating systems for everything? Added to that is the thorny question of security.

Each device has an IP address and is connected through networks to routers that are all accessed by passwords. The conundrum she and other such hosue owners face is the question: “Should these passwords be changed or deactivated?” This type of issues shows just how moving home in the digital age is potentially far more complex and requires more thought. One aspect of no small significance is the question of privacy. Many IOT devices store data (anonymised) on usage which is very insightful to the behaviour of the user. Think for example the data insight you can infer from the time based tracking of a garage door or the usage of interior lights as well as thermostats.

Stacey conveniently referenced a document provided by the Online Trust Alliance which publishes a Smart Home checklist – Advice for buyers, sellers and renters. It is eye-popping in suggestions such as “Obtain confirmation from previous owner they no longer have administrative or user access”.

I could not help but reflect on how this compares to the current checklist for moving home. A quick check online brought me to the Harcourts site which has a very comprehensive checklist. However I am not sure the list has been updated recently as the opening advice was to cancel the newspaper and milk delivery. Do many people still have milk or newspapers delivered?

How times have changed. I recently wrote an article reflecting on the changes in marketing property for sale over the past 25 years. The internet, now celebrating its 30th birthday continues to impact our daily lives and surprises us at time in ways we least expect - like how we approach moving home with our ever more connected smart homes.


Is Auckland likely to follow Sydney & Melbourne with falling house prices?

by Alistair Helm in


Photo courtesy of  Catarina Sousa

Photo courtesy of Catarina Sousa

Much has been written over recent weeks as to the question “will Auckland house prices fall in coming months, mirroring what has been seen across the ditch in the leading Australian cities?”.

I had firsthand experienced of just this question recently when a Sydney based buyer interested in an Auckland property was fearful of making an offer, uncertain as to the future trend of Auckland house prices.

Such concern and uncertainty in my opinion, needs hard data to either support the supposition or to refute it, and thereby allay fears. Recent commentary in the median has put falls in Sydney and Melbourne anywhere from the current 9.5% fall from peak in Sydney and 5.8% in Melbourne to the potential of a 20% fall according to an ANZ economist.

Whilst these data points are useful (and depending on your perspective potentially alarming); for me the visualisation of pricing trends assists better in comprehending where we have come from, and where we may be heading in regard to house prices. With this as a perspective I was delighted to come across some very interesting analysis published on Domain, one of the two leading real estate portals in Australia.

The article titled When was the best buying in Australia’s capital cities undertook a very interesting analysis to visually portray the slump in house prices in leading cities. The research analysts calculated “how much money would have be made from selling the median value house in each city in December 2018, based on when it was purchased over the prior 15 years.

Historic values were adjusted for inflation so both the buying and selling points are represented in today’s dollars. Therefore, the gains and losses reflect ‘real’ returns, taking into account the effect of inflation”. It is worth highlighting that the data set is house sales and excludes apartments and units.

The resultant charts certainly visually portray the slump .. and some degree of a recovery.

Net gain in house prices in Sydney based on Dec 2018 prices

Just to ensure complete clarity in the interpretation of the chart. The data visualisation shows in each bar the notional net capital gain for a house sold in December 2018 which in theory had been bought in relevant quarter, anytime in the preceding 15 years. So to take a specific data point as an example, a house bought in the period Sep 2008 would have appreciated A$400,000 if sold in December 2018 based on median sale price adjusted for inflation, whereas a property purchased in May 2015 would have sold with a loss of A$6,000.

The chart for Melbourne is presented below to provide a side by side comparison with Sydney based on the same model.

Melbourne notional capital gain in house prices to Dec 2018 Properazzi

Comparing these two charts highlights some interesting differences and similarities. In regard to the loss in capital value over the recent 2 years, Sydney has suffered a significantly larger drop almost touching A$200,000 capital loss (if property was purchased in May 2017) whereas Melbourne only edged towards a A$100,000 capital loss in Jan 2018. However the data clearly shows that both markets are recovering and given these are quarterly data sets this trend covers 9 months in the case of Melbourne and 15 months in the case of Sydney, so it would be fair to say this is a trend.

Also of interest is the key difference between the two markets, especially in the period from 2004 and 2012. Sydney almost consistently delivered c. A$300,000 gain, whereas Melbourne showed significant capital gain through the first 3 years at upwards of A$350,000 but since then has edged lower in two clear cycles.



AUCKLAND

So naturally the question is how does the Auckland market look in comparison, and does it show signs of mirroring Sydney and Melbourne?

I have used REINZ stats to extract the same data set - quarterly median house sale price for Auckland from 2004 to end 2018. I have adjusted the data for inflation by using the consumer price index provided by the Reserve Bank of NZ and have mapped the data in the chart below.

Auckland capital gain as at Dec 2018 for house sales Properazzi

There is certainly a similarity between Auckland and the Australian cities. There are though significant differences. Firstly the decline in capital growth in Auckland occurred earlier - starting in March 2012 when capital gain was around NZ$350,000 through to May 2016 when capital gains disappeared. Whereas Sydney began to see falling capital growth a year later in March 2013, but fell sharper to hit nil growth a year earlier than Auckland in June 2015. Melbourne on the other hand began to see falling capital growth in September 2102 and hit nil growth in December 2016, just after Auckland and a full 18 months after Sydney.

The major difference though is that whereas Sydney has dropped to show a bottom-of-the-market based on median sale price in June 2017, representing a fall of A$172,000 as compared to December 2018; Auckland has a bottom-of-the-market in December 2016 representing a fall of $62,000.

So the Auckland market began to see the heat come out its property market earlier, it saw prices drop earlier and that drop has been for longe, but did not slide so far down as Sydney. Add to this, the fact that the Auckland market has recovered to show positive capital gain for the past two quarters.

There is never any real certainty in predicting the trend in property markets, but based on this data analysis I would judge that the Auckland market does not look likely to mirror the Sydney and Melbourne markets; simply because Auckland saw an earlier correction. If anything it could be argued from this data visualisation that the Sydney and Melbourne markets are in some way mirroring Auckland.

The final chart shows the side by side comparison for all 3 cities based on NZ$ data and supports this assesment.

Auckland Sydney Melbourne house price capital appreciation as at Dec 2018 Properazzi

Hustle, Hustle, Hustle

by Alistair Helm in ,


I find serendipity an amazing thing. I find it strange when you start seeing repeated comments in the course of a day, especially when they come in fast succession and when they so clearly resonate in the context of your own day-to-day life. So it was the other week, when I felt I was being bombarded by advice to Hustle!

I’ve been a real estate agent for 9 months now and have been ‘encouraged’ to hustle to get listings, hustle to get your name out and about, hustle to ask people incessantly “are you looking to sell, do you know anyone who might be?”

Just last month a couple of local real estate agencies latched onto Hustle as a theme to grow your business.

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Thinking about this notion of hustling for business, reminded me of one of my favourite sessions I used to undertake in my role at Trade Me Property. I regularly spent about an hour providing insight into the everyday life of a real estate agent to enlighten software developers. This was invaluable; they relished the opportunity to get a sense of the world from the perspective of their customers. And in so doing, take this learning and apply it in the products they designed and built, given the agile environment in which we operated.

I recall that I’d often shock and surprise them with the simplicity of the role of an agent. However, on the other hand for every one of them, the lack of a cushion of a salary, and the incessant need to be working every hour of every day to seek out their next business opportunity. I could sense every one of them were nervous of this. It certainly didn’t illicit an instant rush to join the band of agents, despite the potential earnings.

However, in retrospect what I said then and what I know now seem even further apart apart as my first hand experience has grown. The fact is, what I was talking about then in my opinion actually bares little relationship to the true experience of my first year as an agent. Some months ago, I wrote an article sharing some of my early experiences of being an agent and the challenges I had faced breaking into this new role. Subsequent months have not seen that change much.

Real estate is as is so often said; is simple but by no means easy. To my way of thinking this relates to the process of engaging buyers and sellers in the core element of negotiation. Yet it also fully reflects the process needed to be undertaken before a rookie will ever get close to this end of the business, ever gets close to getting a listing in the first place. It’s again incredibly simple to understand. Without a listing, prospective agents have no presence and no involvement with clients, either as buyers or sellers. Add to this the fact that without a listing it is hard to prove your skills and capability. Sadly, this doom loop is staring every rookie in the face – no listing, no case study to demonstrate capability, so no listing.

How to break out of this doom loop is the core challenge for every agent in their first 6 months. I say 6 months, as the sad fact is that more than half of new agents barely make it past the 6 months mark, fewer last until the first anniversary. The reality is few can self-fund themselves through this period with no income.

I know there will be some readers who will by this stage be thinking to themselves “but this is good ; it sorts out the grafters, the hard workers from the people who just can’t handle it” and the other comment I suspect “fake it till you make it”. I get this. Darwinsim and ‘The Wolf of Wall Street’ syndrome combined. However, might this actually be the counterintuitive? Might the industry be fast tracking people into this industry who are great as prospecting machines rather than being great practitioners of this profession at its core? I may be splitting hairs, but I sense as a reader you will see my point. Is Hustle, Hustle, Hustle the right proving ground of this industry?

Every agent need to get their brand known and ideally top of mind. The simple fact is there are no shortage of agents across all of the country. All of them can and want to, support every customer. So it’s a tough battle every day to win a listing and unless you are known you are literally invisible.

There are many methods of getting known. Door knocking is still favoured as it provides an ‘in your face’ experience that says “here I am I’m a local agent who’s looking for work”. Other agents, such as a former colleague of mine have a natural exuberant personality that shouts from the mountain top. Jadyn Dixon is one of those people who loves the limelight and is doing a stellar job of getting known in a way that may not be suited to everyone – just look at his recent videos and through this his feature on Seven Sharp – incalculable marketing impact.

I am not really in either of these camps to be honest. I cannot muster the courage, or as I see it the disingenuousness behaviour of door knocking, nor do I intend to undertake outlandish videos. I’m choosing a more structured and credibility based route. I’ll readily acknowledge this strategy is potentially going to take longer, but I feel it’s better to remain true to myself and my principles. Principles such as offering deep property insight, significant marketing knowledge and experience, delivered with professionalism in a personable and trusted manner. To date it is working, but to be honest I have to wish I was succeeding more of the time!

As a final note whilst writing this article I came across this interesting post on Medium highlighting the trend of overwork in the tech start up world “Hustle Porn Is the Latest Toxic Scourge to Hit Entrepreneurs’ not a notion I had come across before, but I related to the depiction of the dog-eat-dog attitude that the only way to succeed is to work 18 hour days. Maybe real estate as an industry needs to take a breath and realise endless hustle may actually be counter-productive to the profile and the resultant opinion many people have towards this industry. That’s just my opinion.


THE AUCKLAND QUARTERLY PROPERTY REVIEW - Q4 2018

by Alistair Helm in


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The Auckland market continues to mark time, showing little in the way of a clear direction. It is as if the market were an indecisive person caught at the fork in the road.

“Do I show signs of heightened activity and enjoy sales volume growth and price appreciation, or do I see retrenchment with lacklustre or declining sales and with it a weakening of sales prices?”

Neither future path is yet to be definitively taken. However analysing the core metrics of the market as I love to do, helps to identify the future direction of the market. These metrics are the sales volume trend, the median sales price trend and the clearance rate.


VOLUME SALES

The final quarter of 2018 saw one of the most erratic changes in sales volume for many years. As a total, sales for the months of October, November and December totalled 5,417 properties. This was a 3% rise as compared with the same quarter of last year and totally reflective of the normal market we have seen over the past year as the market has continued somewhat flat. However within that 3 month period the sales as compared to prior year were all over the place.

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October sales were up 19%, November up 12% and the December collapsed with a 21% fall. Yet in total for the quarter - a 3% rise. Why?

I believe what we witnessed was entirely the result of the deadline for the introduction of the changes to the law restricting overseas buyers which came into force on the 22nd October. The fact is any property purchase under contract (be it a conditional or unconditional contract) made legal before this deadline was except from the changes and I firmly believe what we witnessed was a surge in buying activity that brought forward property purchases to meet the deadline. These sales show up in both October and November due to the extent of conditional agreements going unconditional in November and recorded in that month’s stats, as well as unconditional sales in October.

This short term hiccup though does not materially impact the underlying trend in sales volumes as is seen in the moving annual chart below. Sales volumes for property sales across Auckland remain flat. The latest total for the calendar year 2018 was 21,850 down 35% from the most recent peak of the market back in October 2015.

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PRICING

Just as sales volumes have remained flat for close on 15 months, so the median sale price have continued to simply mark time. The median sale price for the final month of the year was $862,000. A year ago it was $860,000. Two years ago it was $855,000. You have to reach back into 2015 and early 2016 to witness the last time median sale prices in Auckland was seen rising significantly. Interestingly way back in August 2016 the median sale price was $854,000, that is 27 months ago, such has been the flattening of Auckland sale prices.

Auckland median sale price trend 2000 to 2018.png

When seen as year-on-year variance it becomes ever clearer as to the fact that Auckland median sales price has experienced an unprecedented period of stagnation. This though as many people will likely comment is not a bad thing. Stability of house sale prices drives over time greater confidence in the market. Initially from buyers who feel less panicked into the fear of ‘missing the market’ as it rises; and then subsequently from sellers who feel more confident as to what the market value of their property is and therefore more confident to move.

Auckland median sale price variance 200 to 2018.png

CLEARANCE RATE

The final of the 3 core metrics which I like to look to to get a rounded and truly objective view of the state of the market is the clearance rate. The measure of the transactional ‘health of the market’. It uses the comparison of sales to new listings ratio as a measure of overall activity in the market.

For the past 3 months, the final quarter of 2018 the clearance rate has bounced back. The last quarterly report for 2018 Q3 highlighted a noticeable and sudden weakening in the market. Halting a trend that looked to be showing all the characteristic signs of recovery. Well, the last 3 months of 2018 seem to have put that weakness out of its mind, and set the trend back on the predictable path which is towards a strengthening in the market.

Auckland property clearance rate 2008 to 2018.png

The current clearance rate is edging back towards 60% . Still a far cry from the 70+% levels seen back in around 2015 but as ever with property markets there is typically a cyclical movement. The current projection is surely heading towards an upward trend in the clearance rate which then tends to be the lead indicator that (as shown by the historical context in the chart above tracking the past 10 years) may well see a resulting inflationary impact on prices.


QUARTERLY PROPERTY REVIEW FOR NZ OUTSIDE OF AUCKLAND - Q4 2018

by Alistair Helm in


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Whilst the Auckland property market marks time in uncertainty as to next cyclical movement, the market outside of Auckland for the rest of NZ shrugs off this perspective and continues to show healthy development. Sales volumes are steady and slowing edging up, albeit from a decline through 2017. Median sales prices are strong and edging up at a rate ahead of core inflation, and the key clearance rate remains high - all indicative of an active property market.


SALES VOLUME

Overall sales of properties across NZ outside of Auckland remains flat. The latest 12 month total of 53,142 is almost in line with the annual total in August of 2017 some 16 months ago. In that time annual sales have hardly moved hovering around the 52,000 to 53,000 level. It is clear though from the chart below that whilst sales volumes have been flat they are at a historical level that is significantly higher than most of the past decade.

NZ property sales exc Auckland 2008 to 2018

PRICING

Unlike the situation in Auckland where sales prices have remained stagnant for well over 2 years, the median sales price for the rest of NZ outside of Auckland continues to rise. December median sale price of $480,000 represented the 89th consecutive month of price appreciation. It was way back in August 2011 that the median sale price for property sales outside of Auckland last saw a negative year-on-year movement, that is over 7 years ago.

Yr on Yr variance in median sale price for property sales in NZ outside of Auckland 2008 to 2018

Back in August 2011 the median sale price was $304,500 for all sales outside of Auckland. Over that 7 year period sale prices have risen 58%. However this increase is behind the increase seen in Auckland over the same 7 year period which is 88% rising from $458,000 to $862,000.

Median sale price for property outside of Auckland 2008 to 2018

CLEARANCE RATE

The activity levels in the property market in areas of NZ outside of Auckland remain strong. The clearance rate of sales to listings ratio remains above 70% which as shown in the chart is high and edging upward, at the same time the trend of median sale prices remains steady with a c.7% year on year increase. These collection of core metrics demonstrate that outside of Auckland (which is undoubtedly experiencing a stagnant market) the rest of NZ moves along at a healthy pace with no easing in demand as property sales remain active and price pressure remains.

Clearance rate analysis of property sales to listings for NZ exc Auckland 2008 to 2018