18 October 2009

Data released this month from REINZ, recording the property market’s performance for September 2009, show that the number of houses sold increased 10 percent from a month earlier.

The first month of the ‘spring selling season’ also recorded a 1.9 percent rise in the national median house price from a month earlier.  The median price in September was NZ$350,000 – just below its peak of NZ$351,500 back in November 2007.  September’s median price was also a notable 6.1 percent higher than the median for the same month last year when it was NZ$330,000.

There were 6,464 sales during September, up from the 5,878 sales recorded in August and the 4,499 sales in September 2008.

REINZ President Peter McDonald said the figures “indicate improved confidence of buyers and sellers in the marketplace.”

“We’re seeing a slow, but steady, appreciation in sales value and we’re now back to the prices being fetched in the corresponding period in 2007 when the median was NZ$351,500,” he said.

On average in September it took 33 days to sell a dwelling, down from 34 days in August.  This was 19 days quicker than a year ago and 3.2 days faster than the September average.

ASB economist Jane Turner said that housing demand continued to be underpinned by a lift in net migration and low interest rates.

“The current heat in the housing market is taking some time to cool, with supply sluggish to respond,” Ms Turner said.

While new listings are increasing, it has not yet been enough to meet demand and so house prices are continuing to be bid up.  The “very low” number of days to sell suggested more house price inflation pressure was likely in the next few months, she said.

She also expects that the recent strength seen in the housing market will attract more sellers and encourage new building, which will soon correct the supply and demand imbalance.

However, with some of New Zealand’s prominent real estate agencies reporting high level of sales, (one reported writing 44 percent more sales in September compared to the same month a year earlier), it is expected that buoyancy in the housing market is set to continue.

Ref: NZ Herald, NZPA

12 October 2009

Recent statistics from QV Valuations (a leading property valuation agency) show increased activity in the New Zealand property market for the year to September 2009, with house prices recovering to levels close to that that of a year ago.

This data supports views that the New Zealand economy has emerged from its longest recession in more than 30 years, Reuters reported today.

In many areas of New Zealand, there has been an increase in sales with more listings.  According to QV Valuation Manager Glenda Whitehead, “this increase in activity is normal for spring but there is still a feeling that activity levels are below normal, with somewhat fewer listings to date this spring than was expected.”

It seems that in general there are more buyers than sellers with increased competition among keen buyers edging prices upwards. The average sale price across New Zealand increased further to $387,567 NZD in September from $385,426 in August.

Nationwide values are now up 2.7 percent up from their low back in April 2009, however values are still well below New Zealand’s property market peak of late 2007.

Increasing values in recent months mean that most of New Zealand’s main centres now have values above the same time last year.

The monthly residential price report from QV is based on sale prices of properties over the past three months compared with sales over the corresponding three-month period a year earlier. The data is not seasonally adjusted.

Ref: QV Valuations, NZ Herald

3 October 2009

According to the latest New Zealand Property Report, the serious shortage of properties seen in the past few months looks to have eased.  With the move into the spring/summer period, it is traditional to see an increase in listings; and in September there were 12,674 new listings up 19% on the previous month.

Despite the uplift in listings during September, the level of new listings over the past 12 months shows a 21% fall with 134,873 new listings in the recent 12 months as compared to 172,711 in the prior 12 months spanning 2007/8.   Even though an increase in listings was seen in September, it is not enough to subdue talk of a looming property shortage in New Zealand.

With this increase in new listings came a substantial increase in asking price expectation with asking prices for the month of September up 6% on the previous month. This spike now takes the asking price expectation back to within 2% of the peak of the market in late 2007.

Coming into spring it was anticipated that both of these figures would lift however the increases seen were much higher than expected.

Alistair Helm who analyses this data in his monthly NZ Property Report said, “While we always expect an increase in both the number of listings and the price expectations during the spring/summer period, this relatively large jump on both figures is a strong indicator of improved health in the property market.”

Most significant increases in asking prices were seen in the Auckland region and the upper North Island.  The Reports states: “This data supports the view that the property marketing is most active in the major metropolitan areas whereas the provincial parts of the country are yet to witness this pick up.”

This reinforces the predictions of leading economists that Auckland will lead New Zealand’s property market recovery and given this recent data, it is already exhibiting strong signs of picking up.

Ref: NZ Property Report – September 2009

21 September 2009

New Zealand is experiencing an influx in migration numbers according to figures published today by Statistics New Zealand.  New Zealand has had its highest annual net migration gain in nearly five years during the 12 months to August 2009

Many view this gain in population as helping the recovery of New Zealand’s housing market.  New Zealand’s growing population means an increasing demand for housing and this has resulted in a boost for its property market over recent months.

Global financial turmoil was thought to have lifted the number of New Zealanders returning after living overseas, as well as reducing the numbers seeking to live elsewhere.

New Zealand’s net migration gain was 15,600 in the year to August, up from 4,900 in the August 2008 year.  This is the highest annual net gain since the November 2004 year, Statistics New Zealand said.

The 87,500 people arriving on a permanent and long term (PLT) basis was up 800 or 1 percent on a year earlier.  At the same time, the 71,900 PLT departures were down 9900 or 12 percent on a year earlier.

For just the month of August, PLT arrivals exceed departures by 1600,compared to 500 a year earlier.

The trend seen in recent years of many New Zealanders leaving to live in Australia has decreased markedly and can be noted in the 1800 fewer departures to Australia in August 2009 compared to August 2008.  Departures to Britain in August were 200 less than the same month last year with an overall decrease in PLT departures of 29 percent.

PLT arrivals in the month of August were down from August 2008, said Statistics New Zealand.  There were 1000 fewer arrivals of non-New Zealand citizens but this was partly offset by 200 more arrivals of New Zealand citizens.  PLT arrivals of non-New Zealand citizens had been declining since April.

Seasonally adjusted, PLT arrivals exceeded departures by 1600 in August, down from 2400 in July, but similar to the level in June.

Ref: 3news.co.nz

 19 September 2009

The views of Westpac Bank’s chief economist, Brendan O’Donovan, were recently aired at the Transtasman Credit Summit in Wellington.  His optimistic perspective was that a migration-driven housing construction boom would fuel New Zealand’s economic recovery, with Auckland leading the way.

O’Donovan’s point of view is unlikely to be welcomed by New Zealand’s Reserve Bank and Treasury, who are hoping for an export-led recovery complemented by housing market restraint.

Internationally, O’Donovan noted leading indicators were pointing to a strong recovery in global manufacturing activity in the next 9 months with uncertainty after that time.

However, he was more positive about New Zealand’s recovery where the “big story” was the ongoing migration turnaround.  Last year net inward migration was just 3500 but net migration in the year to July 2009 is 14,500 and it is expected to be headed for 25,000.  The average for the past 10 years has been 11,000.

This increase in net migration can be attributed to the sharp fall in numbers leaving New Zealand, particularly a reduction in the mass exodus of Kiwis to Australia seen in recent years.

This migration turnaround was a key factor in what O’Donovan saw as an impending housing shortage.  At present the housing build rate is a very sluggish 12,000 per year, “it should be running at about 20,000”.

“Given current build rate and migration, you’d actually need about 30,000 houses built to close the gap, it’s just not going to happen.

“The upside in terms of this construction cycle is huge.

“This migration and housing shortage story is certainly enough to sustain the New Zealand growth story for a good few years, three years or so.”

He said that this pick up in housing activity would translate into greater home equity withdrawal and actually spur consumer spending.  This is not what the RBNZ would like to happen as they want to see New Zealand’s recovery export-led, like it has been in most other recoveries.

However, Westpac is optimistic about a “permanent sustained lift in export receipts” driven by improved commodity prices.
O’Donovan also believed Auckland, which fell into recession earlier than the rest of the country last year due to its higher debt levels, was “leading the country out of recession”.

“Super high interest rates last year hurt Auckland more than any other part of the country, the lower interest rates this year are benefiting Auckland more than most.”

In respect of the rest of the country, prospects are also looking brighter.   When dairy prices fell they began to feel the pinch but thankfully a turnaround in dairy prices means that the worst is going to be averted.

O’Donovan anticipates that we will see all parts of the economy starting to lift by the beginning of next year.

Ref: NZ Herald

9 September 2009

In a recent World Bank report New Zealand ranked second as the easiest country in which to do business.

New Zealand maintained its position for the fourth year, with Singapore retaining its crown at the top.

The World Bank report ranks 183 countries based on ten indicators that measure the time and cost of government requirements in starting, operating and closing a business, trading across borders and paying taxes.

New Zealand ranked second after Singapore followed by Hong Kong and the United States.  The top 10 countries were unchanged from last year apart from the United Kingdom at five swapping places with Denmark, now at six.  Ireland, Canada, Australia and Norway rounded out the top ten.

Most large economies maintained their rankings from the previous year’s report.

These findings reinforce New Zealand as having an attractive business environment, with low barriers to entry, and policies that encourage strong investment relations with countries overseas.

ref: stuff.co.nz

7 September 2009

Data from one of New Zealand’s leading property valuation companies, QV Valuation, has shown positive results for the New Zealand property market during August.

Four consecutive months of value increases have pushed up nationwide property values 1.9 percent higher than they were back in April this year.

In August the national average sales price increased further to $385,426NZD from $382,758 in July.

QV Valuation Manager Glenda Whitehead commented that confidence appeared to be returning to the market with solid sales activity during August.  The number of sales is up from this time last year when they were at historical lows.

A continuing shortage of listings has sparked renewed interest in property.  The increased competition amongst buyers is resulting in quality properties selling quickly and prices being pushed up.

But Ms Whitehead warned that the recent rise in values was likely to be a temporary surge rather than the start of another boom.

“If more properties come on to the market in spring, as expected, then the imbalance of motivated buyers and the shortage of quality properties could be corrected and values stabilise.”

Property values in all of New Zealand’s main centres have increased in value over the past three months.

Auckland:
The average sales price for the Auckland region increased slightly from $500,315NZD to $502,022NZD.

Wellington:
The average sales price in Wellington rose from $429,571,NZD to $431,614NZD

Christchurch:
The average sales price for the city increased slightly from $342,993NZD to $344,401NZD

 3 September 2009

One of Auckland’s largest real estate agencies has reported that Auckland’s property market is showing good signs of movement with house sales in August up more than 65 percent on the same month last year.

Average prices were also up slightly from August last year, rising 1.5 percent to $520,023.  They also saw an improvement on their previous month’s sales, up 6.5 percent.

“Keen interest has returned to the Auckland market…” said Peter Thompson, company managing director.

“However, it’s not a case of the market taking off.  Rather, the mood is one of quiet confidence that the time has arrived to act.”

Buyers were still being “restrained and selective” said Thompson, but were committed to completing transactions, which had lifted activity across all areas.

Still of concern is the low number of properties for sale and this is a significant factor preventing the Auckland housing market returning to a “nice balance”.  At the start of September the number of properties on their books was their lowest for 19 months.

But given the improvement in the level of sales activity, it is anticipated that more sellers will now enter the market.

ref: NZ Herald

2 September 2009

Latest data showing a decrease in new property listings suggests that scarcity of new properties entering the market in New Zealand’s main centres will put pressure on property prices.

According to the latest monthly issue of the NZ Property Report, the level of available inventory nationally — the number of weeks it would take to sell the country’s entire available stock based on average sale times — was down 34 percent on a year ago in August.

The monthly NZ Property Report summarises changes in the property market based on new listings and movements in asking prices (as opposed to actual sales prices). The nature of these statistics provides a forward-looking perspective of where the property market is heading.

The Report for August reflects a stable position in New Zealand’s property market with little movement in asking prices, level of inventory and level of new listings.   However, new listings decreased slightly when usually an increase is seen just before the ‘traditional spring upturn’.  There is concern that new listings will not be sufficient to meet the anticipated increase in demand.

The NZ Property Report states that “Spring is one of the most active periods of the year and with constraint of new listings; the market may not be able to meet this demand without consequential impact on prices.”

This news supports findings in the recent report from Infometrics, which suggests that New Zealand house prices will rise.  The report forecasted price increases of up to 24% in New Zealand’s main centres due to a shortage of new housing and increasing demand from buyers driven by low interest rates and an increase in net migration.

However, with asking prices remaining steady throughout August, prices are not yet reflecting this anticipated pressure on property prices.  If potential sellers continue to hold off listing properties, the shortage of available stock could push prices up over the coming months.

August 2009

The average time it takes to sell a residential property in New Zealand fell sharply in July, compared to the corresponding month in 2008, acting as a further indicator that the New Zealand property market is on the mend.

Fresh data released by a leading New Zealand mortgage company shows that their property cycle indicator increased to an optimistic 5.95 last month, up from 3.98 in June.

The New Zealand house market gauge takes into account changes in the number of New Zealand homes sold, changes in New Zealand property prices and the time taken for New Zealand properties to sell. It runs from -10 for a strong decline to +10 for strong growth.

The average property in New Zealand took an average of 37 days to sell in July, a staggering 21 days lower than the same time last year, and the greatest year-on-year improvement since records began in 1991.

Around 6,000 homes in New Zealand were sold in July, a similar number to that recorded in June, but up 34% year-on-year.

The average price of a home in New Zealand also held steady at $340,000 (£142,300) in July, which is similar to that recorded during the same period last year.