Price data can confuse

Thursday, April 9th 2009, 6:34PM

We’re in that busy monthly period where various firms report on activity in the property market over the past month. Looking at what has been put out so far one wouldn’t be too far wrong to throw their hands up in horror and say “what’s happening?!”

Many of the reports are quite positive, including the latest from REINZ and Barfoot and Thompson, but then others like QV’s report are a bit gloomy. It is saying that house prices are down around 9% on a 12-monthly basis.

This report is worth pondering a little more for two reasons. One is that its numbers are done on a rolling three monthly average. Secondly, in this part of the cycle, where there are a lot of different trends happening, the overall average number can be a little misleading at a headline level.
When you dig into the report you will find some areas and house types are down, while others are up.

One area, outside of these reports, that is attracting interest at the moment is commercial property. As Good Returns reported this week it seems that property syndicates are making a bit of a comeback.

These syndicates are proving attractive to a range of people including those dissatisfied with the returns being offered on bank deposits. Commercial property like the syndicates on offer have returns of around 9% with monthly interest payments that are certainly appealing. But as explained here there are some issues investors need to be aware of.

The people who are putting these syndicates together seem to agree there is a window of between one year and 18-months where the conditions will be ripe for these syndicates to be established. The conditions which are helping are low interest rates, good yields and a group of existing owners who want to quit their properties for a variety of reasons.

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