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Presentation at the debate on the NZ Housing Market held at the University of Auckland - 13th August 2009
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The Housing market Conundrum
University of Auckland Thursday 13th August 2009
Disclosure of interest
Industry owned – 93% of all licensed real estate
offices subscribe
Sales volumes - likely to grow steadily back to long term volumes
Rising demand – stifled natural demand & population growth
Constraining demand - continued tight credit criteria
Restrictive supply - Returning flow of new builds
Balanced supply - steady flow of new listings
Price movement in a narrow band from current $320,000 - $350,000
A quiet / un-dramatic property market
Boom or Bust – everyone has an opinion
Access to accurate, timely and comprehensive data is
critical
The web has opened up a richer source of data on the dynamics of
the market for property
TurnoverTurnover ValueValue PacePace DemandDemand SupplySupply
Sales PriceSales PriceProperty sales
Property sales
ValuationsValuations
Days on the market
Days on the market
InventoryWeeks of
sale
InventoryWeeks of
sale
New listingsNew listings
Asking priceAsking price
Website traffic
Website traffic
Lead generation
Lead generation
Better informed decisions based on richer information
New monthly report
Asking price – truncated mean
Current data lags the market by up to 4 months
Property is a local business – small markets can distort data
Principles of real estate
TurnoverTurnover ValueValue PacePace DemandDemand SupplySupply
Sales PriceSales PriceProperty sales
Property sales
ValuationsValuations
Days on the market
Days on the market
InventoryWeeks of
sale
InventoryWeeks of
sale
New listingsNew listings
Asking priceAsking price
Website traffic
Website traffic
Lead generation
Lead generation
Analysis of new indicators of the market
Property sales – all time low
Putting sales into perspective
Supply – inventory building
Supply – true inventory more balanced
Demand – web traffic as a surrogate of consumer confidence
Demand - Lead generation showing strong interest and enquiry
Buyers now feel in control
Property Prices - stability
Property Prices – 20 months post peak
Property Prices - no inflated expectations in asking price
Property Prices – Comparison to UK
Fundamentals in NZ are vastly different
-3.4%
-20.6%
Factors that drove the UK / US property markets were unique
2.1 million 4.0 million 3.5 million
2004 2007 2009
NZ property market is not the US
Vacant homes in US
Property Prices - future path of property prices – UK 80’s / 90’s
Sales volumes - likely to grow steadily back to long term volumes
Rising demand – stifled natural demand & population growth
Constraining demand - continued tight credit criteria
Restrictive supply - Returning flow of new builds
Balanced supply - steady flow of new listings
Price movement in a narrow band from current $320,000 - $350,000
A quiet / un-dramatic property market
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