Archive for January, 2009
One of the principles of zoodle is that whilst there is masses of valuable property information on the web, finding it can be a challenge and that is where zoodle can be a godsend!
We have built zoodle on a vast amount of information – possibly as much as 60 million pages. But we want to make zoodle the best source of property information. To do that we want to keep updating and adding new information, and this is where you can help us.
We created suburb profile page for each suburb in the country – there are around 1,600 of them although according to the official mapping database there are over 3,100 dwelling centers known as suburbs! To really make these pages rich and valuable for visitors we have a detailed summary of the suburb, what transport links are like, shopping, eating out and other snippets of local knowledge.
To see what I mean check out the profile for the biggest suburb in the country – Papatoetoe. This profile was written by Angela Signal who works for Barfoot & Thompson. Angela like many other real estate agents around the country have contributed to around 200 suburb profiles so far – we still have another 1,400 to go.
If you would like to help us write a suburb profile we would be delighted to have your support. Just find the suburb where you live or the one you would like to profile and if there is no profile there click the link to go to a page to complete a profile. In return for this contribution we will credit you with being the author and attribute the content with a link to your website.
So here for example is Paeroa – who wants to be world famous in NZ by writing a profile for the famous home of L&P!
Whilst we are sure that you will provide a rich and balance summary – we do wish to give your submission the once-over by our editors, for this reason your contribution will not be published live but may take a short while to appear – so go on have a go, you no doubt live in a suburb you know heaps about and would be keen to share with others.
The Real Estate Institute (REINZ) has been providing sales data on a monthly basis by price band for over 5 years now and this segmentation is helpful to see where there is activity within the overall market.
The chart below shows on a quarterly basis the proportion of all sales by price band in 4 categories (the $1m+ band was only instigated mid way through 2005).
Clearly with the rise in median price over the 5 year period from$210,000 to $328,500 the proportion of property sales falling into the higher price brackets have increased. Sub $400,000 properties represented over 86% of all sales 5 years ago whereas in 2008 they represented less than 65%.
What is very noticable from the chart is the fact that over the past year the proportion of property sales in the sub $400,000 bracket has reversed its decline and has actually been growing. To demonstrate this a little better the graph below explodes these price band groups to highlight in the green line against the left hand axis the monthly tracking of sub $400,000 property sales as a proportion of all sales. Here the % of all sales for this sub $400,000 category reached a bottom point of just over 60% before rising to over 65% in late 2008.
Equally noticable is the plateauing of the proportion of sales in the intermediary price bands between $400,000 and $1m. The relatively small segment of properties over $1m has remained fairly stable at around 2.7% of all sales over this period.
The timing of these adjustments as highlighted on the graph really hit in late Autumn of 2007 and as the graph below shows this date period reflects the start of the fall off in overall monthly sales of property.
So what can be deduced from this analysis?
The transaction activity in what has been a very stagnant market for the majority of 2008 has been focussed in a growing proportion around sub $400,000 properties, whilst the price brackets upwards of $400,000 has gone exceptionally quiet indicating a combination of a lack of buyers in this sector matched with sellers either unwilling to match the market price of owners or owners not keen to contemplate selling in what has contined to be a buyers market. Equally the activity in this lowest price bracket could reflect a growing liquidity of investment properties within the private landord market.
A 50% increase in property sales is likely to be seen in the next few years as the market climbs out from the lowest relative point of the past two decades.
Over this period since the early 90′s we have seen in NZ a 29% increase in the housing stock; adding an incremental 345,000 new homes taking the total to over 1.5 million). This steady growth as a reflection of an active level of migration puts into stark perspective the latest property sales figures.
For whilst the total sales of 2008 at 56,000 was the lowest level since 1992 (closely followed by 1992 at 63,270 and 2000 at 65,332) when seen as a percentage of the housing stock the level of true sales is shown to be a very serious low point for the industry. The chart below shows sales as a % of dwellings each year (the red line is the average level over the period).
The sales in 2008 represented just 3.7% of all dwellings, that is equivalent to just one house in every 27 being sold, or put another way means that on average based on these sales people are moving house less frequently – over the past 3 years that average has moved from 7 years to closer to 10 years.
Now clearly the factor behind the sharp fall in sales is not a cultural shift of lifestyle – it is a function of economic conditions, the market has frozen over the past 12 – 18 months as uncertainty over property prices, access to credit and security of income have come to impact the psyche of property buyers.
At some stage some of these factors will ease and with that will come an improvement in the liquidity of the property market. This will happen in 2009 as the cultural change of property moving has not fundamentally changed and now more than ever an active proportion of the population are looking to move for all manner of reasons. When the right conditions eventuate then the sales will begin to pick up with the percentage of dwelling selling returning towards the average of the past decade of around 6% which equates to around 90,000 sales, a 50% increase on this year’s total.
The statistics released by the Real Estate Institute last week for the month of December showed a slightly brighter result than expected when it came to sales volumes. A total of 4,302 properties were sold in December, up slightly on the November figure of 4,279. Normally we expect to see a smaller volume in December given the reduced business days in the month. Historically December usually represents around 75% to 80% of the sales of November.
Having made that comment the fact is that the year of 2008 goes down as the lowest selling year for the real estate industry over the past 16 years. A total of just 56,128 properties were sold – a drop of 39% as compared to 2007; and 53% down on the peak year of 2003 when 120,108 properties were sold. In terms of comparable monthly sales the chart below ably demonstrates the extent of the property sales collapse, tracking the sales of the past 5 years.
The extent of the decline in the sales of property can also be seen from the chart below which tracks the 12 month moving average volume of sales since 1993. The volume shown by the red line (right hand axis) shows a peak in the 12 months leading up to April 2004 at 121,777, from there the sales began to fall although they did stage a rally in the early part of 2007 and peaked again in April 2007 at 106,243 before descending to the current level of 56,128.
The green line tracks the value of all transacted sales over the same period since 1992 (left hand axis). The very clear components of this line are the periods of major growth and decline. From the period up to November 2000 through to the initial peak in April 2004 the moving annual total value of transactions grew by 150% from $13.3 billion to $33.3 billion. The market then took a breather for a few months before ascending to the heights of $41.1 billion achieved in year to June of 2007. In total that run lasted 79 months (over 6 years).
Since that peak the value of the market in terms of transactions on an annualised basis has fallen by more than 40% in just 18 months to the current level where the total value of transactions in the 12 months to December 2008 was just $23.2 billion.
Omaha is well recognised as a holiday home retreat from Auckland, just 80 km from the CBD this strip of golden sand has attracted significant new development over the past decade. The resident population according to the 2006 census amounted to 384, although take a weekend or summer day and that number is sure to swell by over 1,000.
The recent media coverage speaks to concerns as to property prices falling in the beach area with the article from the NZ Herald of 11 Jan titling it as “Property slump hits Omaha” and referring to local agents reporting the slowest sales for more than 15 years. There were 45 sales in the Omaha suburb in the past 12 months as compared to 119 for the whole of 2007 – that is a significant fall of 62%. As would be expected the majority of sales occur over the summer period, in the first 3 months of 2008, 20 of the 45 sales were recorded.
The latest media comment on Omaha again from the NZ Herald speaks of an auction to be held on Sunday the 25th January – a total of 17 properties are up for sale. That level of stock being sold at one time would in theory would represent 1 in 3 of all properties on the market at the moment.
Currently there are 62 listings on realestate.co.nz for Omaha of which a number are multiple listings – marketed by more than one agent. In total according to the statistics on Zoodle there are 1,377 properties. This represents around 6% of all properties currently on the market as as quoted in the article.
Naturally with such a beautiful vista as Omaha offers there are some spectacular properties especially towards the more newly developed south end – where this top priced property can be found. Priced at $3.95m this spectacular 5 bedroom 360m2 beach home is being marketed by Shane Romani of Bayleys. The property certainly has some spectacular views. Views which are certainly attracting the interest of overseas buyers as can be seen from the viewing statistics of the property – just on half of all views have been from outside NZ with Australia, the US and UK most active viewers.
To gain a fuller perspective on the suburb of Omaha as well as statistics of median price and inventory movements as well as “days on the market” for sold properties check out Omaha suburb profile page. Additionally if you are looking for more information on a property in Omaha – one you may already own or always wanted to buy, then search by street in Omaha.
Herne Bay holds the honour of the most expensive suburb in NZ as reported recently in the NZ Herald. Whilst the average price quoted in the article is open to some interpretation there is no doubt that this suburb is an exclusive enclave of inner Auckland.
The last census showed that there is a resident population of 3,666 from among 1,491 dwellings.
In the 12 months from December 2007 to November 2008 there were 44 reported sales by real estate agents in the suburb – total sales value – just under $83 million, resulting in an average price of $1.885 million. The graph below shows the distribution of sales from highest to lowest.
The top priced property sold for $9.25m in the year, however there were only 5 properties sold over $3m, and a further 7 in the range of $2m to $3m.
Currently there are 67 properties on the market with some units for sale around the $500,000 mark whilst single dwellings start around the $1m mark.
To gain a fuller perspective on the suburb as well as statistics of median price and inventory movements and “days on the market” check out the Herne Bay suburb profile page, additionally if you are looking for information on a particular property in Herne Bay – one you may already own or always wanted to buy, then search by street in Herne Bay.
Interesting article by the Economics Editor of the Telegraph in the UK entitled “Property Market – the Twilight Zone“.
Clearly the UK has already seen a very large drop in prices (c.15%) over the past year with certainly no sign of a bottoming out. Whilst the global credit crisis is a major contributor to the decline – the signs were writ large well ahead of this time. This article valuably analyses the impact of the UK government’s desire to strive for ever higher levels of home ownership – this policy being shared here in NZ.
Interestingly though Germany which has lower levels of homeownership (43%) has been immune to the ravages of property cycles on a macro level especially through the last decade, whilst they did see a bubble in the post unification era of the 90′s but despite anticipated bubbles as yet none have eventuated. Whilst a rise in ownership would probably lead to a bubble – the over ambitious attainment of ownership levels of the high 60% and 70%’s may be a factor in fueling bubbles.
Welcome and thanks for finding us!
This blog is a key part of the zoodle site and I hope you will find it a valuable virtual “water cooler” at which to rest a while and converse.
Property holds a fascination with people in this country and naturally there is a mass of diverse opinions on the property market. Whilst this diversity is healthy; good information is the most important thing; and that is the point about zoodle, and that is where this blog can complement the data rich content on this site.
On this blog you will likely find insight and analysis of the market from multiple sources, commentary on the media reporting of the property market as well as insight into the comparable position of overseas property markets.
This blog is written by me in my role as Managing Director of Zoodle – I do wear two hats also being the CEO of realestate.co.nz and author of the Unconditonal blog which will either make me completely schizophrenic or more hopefully a knowledgeable individual in the marketplace – you decide!
In principle the zoodle blog will be more about the market and the trends in the market, whereas Unconditional is more about the real estate industry and the online marketing of real estate. In short, if you want to know more about the market and what buyers and sellers are interested in, then the zoodle blog is for you. If you want to better understand the real estate industry and the process of buying and selling as well as online marketing of real estate then Unconditional is for you. But as you can see there is no absolute clear demarcation line – so my advice set up an RSS feed for both – because one thing is for certain – I won’t duplicate content
Managing Director – Zoodle Limited
Subscribe to zoodle