Playing the waiting game
Thursday, November 6th 2008, 1:26PM 
6 Comments
Over the next few days we are going to start seeing the latest house price sales and volume numbers and I am sure they will be eagerly awaited.
One of the trends in the housing market is that normally, come spring and summer, there is a pick-up in sales activity. After a sad winter, where volumes have been tiny and prices falling, there is plenty of angst building over whether there will be a turnaround.
I saw a graph the other day which compared site traffic on one of the big real estate websites and compared levels to the past two years.
What grabbed my attention is that it showed there was more activity on the site coming into spring this year, in line with trends of previous years. The assumption being that this increased site activity could be a precursor to an improvement in the market.
However, it appears to have been stopped dead in its tracks recently, September 17 actually. Since that date activity has fallen off noticeably. The conclusion being that this was not a good omen for the market.
Added to that there is another highly negative report from an economist today, saying “If there was one time in a lifetime to be negative about property market prospects, especially residential property, this is it!”
Another interesting story this week was Alistair Helm at realestate.co.nz suggesting the Waikato property market may be a ‘bellweather’ region. Statistics show Waikato was one of the first regions to go into the slowdown.
I have no crystal ball of what will happen, but there is anecdotal evidence things may not be totally awful. Several people – and not the regular real estate industry cheerleaders – have noted that things have picked up a little.
Just driving around it is evident there is plenty of stock in the market and it appears an increasing number of sold signs are going up.
It seems like a time to be very cautious out there, and one would think that it is a buyers’ market at the moment. Whether that is happening or not will become clear over the next week when the reports come in.
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Comments from our readers
On 6 November 2008 at 10:51 pm TDB said:
I still struggle with the lack of NZ'ers ability to realise that what is happening overseas does impact here ... property will not get better in the short or medium term...prices will continue to fall (get used to it), the economy wil get worse irrespective of the outcome on Sat', and the strategy that NZ needs to adopt is very defensive...property as an asset calss is still relevant, still offers opportunity BUT there is no quick buck, banks will remain tough on borrowers, stressed sellers will accelerate offering opportunity..... hold on to cash m be patient, 6 months down the track property (in the main)will be cheaper...... On 6 November 2008 at 10:59 pm Phillip said:
New Zealanders have to learn to firstly live within their means and then to save. While some do an awful lot do not and until most of us do we will dependent on the savings of other nations, and that is going to get more expensive. On 6 November 2008 at 11:18 pm Alistair Helm said:
Just for clarification the graph you refer to in this post is the aggregation of 7 real estate websites - both company websites and portals that have been active in the past 2 years. The metric for search activity is number of sessions which unlike Unique Browsers can be added. The data is drawn from Nielsen Online - a respected market research firm.
In case anyone asks the question why Trade Me property is not included in the statistics. The reason is that in my judgement whilst Trade Me Property has more visitors to their listings than any other website by a factor of 3 - the trends in that traffic have by analysis less to do with seasonality and consumer sentiment and far more to do with the overall traffic on the Trade Me site overall at a point in time. The fact is that traffic to sub categories of Trade Me - eg. cars, jobs, property tend to follow a very steady fixed % of the total traffic to the overall site.
On 12 November 2008 at 7:48 pm Nick Symes said:
why all the doom and gloom. Outside Auckland the prices are cheap compared to other countries and a family on an average wage can afford a comfortable 3 bed place, no problem. With more people entering NZ than going and less houses being built i think prices will not go down much further. If you ask the Housing Association they are crying out for properties to lease. Wages in NZ have gone up, interest rates have come down. NZers should stop worrying about the US and the UK. Turn your TV's off! On 14 November 2008 at 10:09 am John said:
I still think it is a great time to buy. Tax cuts. Wage rises. Cheap money, plenty of renters. I also think many NZers will be opting out of Kiwisaver once their year is up, this injecting more money into the economy. Well lets face it, many of the Kiwisaver investments have been crap. I know where I would rather put my money! On 23 November 2008 at 9:59 am pete said:
what the pesimistic story tellers out there forget to tell you is that there has to be massive building growth in NZ over the coming years to accomidate people migrating here from wealthy western countries and also the fact that people are living longer (much longer) and being cared for at home . so it's a no brainer as far as owning rental properties as they will be in huge demand in the future Commenting is closed
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