Tag Archives: realestate.co.nz

Big is beautiful: why Open2view is the ‘gold standard’ for real estate photography

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Ask anyone involved in real estate who Alistair Helm is, and they’ll know. If they don’t, odds are they’re doing it wrong.

Alistair is the former CEO of Realestate.co.nz, the property website (aka portal) that displays virtually every single house for sale in New Zealand. Alistair, like Open2view, recognised early two crucial details about the real estate market.

The first point, that online would become the only source for the vast majority of homebuyers, has consequently been proven absolutely correct.

Having help build realestate.co.nz into the behemoth it is today, he is now showcasing his talents on a global scale. Recently Alistair became CEO of Property Portal Watch, which is the website to follow to keep up with developments in online real estate.

As such, the site is “specifically designed to serve the owners and operators of property portal sites” – but one recent article from Alistair deserves a wider audience.

Property Image Sizes, Getting Bigger – Catch the Trend emphatically makes our second important point: that without good, preferably professional photos, your listing is dead in the water.

Alistair reports:

Recent research has reinforced what most real estate agents and for that matter property portals already knew, property shoppers look first and most often at photos.

The research study undertaken by the Institute for Behavioral and Experimental Real Estate at Old Dominion University at Norfolk, Virginia found that 95% of people, when viewing real estate websites view the first photo for around 20 seconds.

Photos sell property; and this study only reinforced this fact by demonstrating the lesser importance of agent descriptions as part of the listing. The researchers found that a staggering 4 out of 10 people completely ignored the agent spiel.

The whole academic paper Alistair quotes can be read here. I’ll save you a headache; one of the authors, Professor Michael Seiler, summed the findings up perfectly: “without an eye-catching photo, the battle is lost before it begins.”

The first photo is the key weapon in winning the battle. Not only does it have to be beautiful, it also helps significantly if it’s big.

Alistair explains:

The future is becoming clearer in regard to the viewing experience for real estate. Mobile, or to use a better expression, hand-held devices, being tablets and phones or just phablets will be at least half of all viewing for property; the other half may well end up being viewed on ever bigger screens. It is likely that the traditional PC monitor will be replaced by the flat screen TV as property buyers sit back on the couch and browse property on their 60” High definition LCD TV.

So how big are most real estate photos? Alistair has done some homework and found the largest listing page images on realestate.com.au at 772×579, followed by Sweden’s Hemnet (690×460) and US site Trulia (640×427). The smallest? Immoweb.be (“Belgium’s leading property website!”) at a microscopic 145×145.

Immoweb tiny images

Anyone home?

All far smaller than the typical computer monitor, let alone those smart TVs that will soon be all the rage.

So whom do you turn to for the world’s largest, high definition, professional photos?

Open2view, that’s who!

Alistair gave this wonderful endorsement of what we do:

In reviewing the global portals I was torn as to the inclusion of the site of Open2View… They are not a portal in the true sense of the term of aggregating listings from multiple customers and earning income from subscription and property advertising. However there is no doubt that their website is one of the most immersive viewing experiences of any property website I have ever come across.

They make the property image the hero – front and centre with everything else pushed back out of the way – listing photos are 960 x 640 with the overlay switching to full screen at 1135 x 750 – a staggering experience coupled with professional quality images. Whilst not a true property portal, Open2View for me certainly sets the gold standard for online property images. [Emphasis added]

Even better – if your screen’s big enough our fullscreen photos go all the way up to 1600×1066. No matter how you look at them our photos are bigger, brighter and better than anywhere else on the web – and now you don’t have to just take our word for it!

Fullscreen Open2view listing example

Just click the Fullscreen icon on any of our listings for a fully immersive househunting experience.

Neither the study’s findings, nor Alistair’s words of wisdom, should go ignored. Our advice to house sellers: if you want your house looking its very best, tell your agent to contact the Open2view team. House buyers, check out Open2view first – you won’t get a better viewing experience anywhere else.

And while you’re online – check out Alistair’s other website, Properazzi, for more news and views on the real estate market.

March Property Report: All the leaves are brown/And the skies are… still blue

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Autumn leaves Open2view

Autumn is here at last, as this photo by Open2view South Taranaki’s Michelle Hoffmans shows. 

Though our days are getting cooler, and my ability to type thus severely hampered, it’s still sunny days in the real estate market.

I will write this quickly, operating on the theory that fast typing will create friction, in turn warming up my cold dead hands.

Realestate.co.nz’s NZ Property Report for March shows the median asking price has moved just 0.3 percent in a month, while listings are down 3%.

The changes are more pronounced when comparing March with the same time in 2012. The average asking price is up 4% over this period while listings are down by the same percentage. Inventory, at 27 weeks, is 20% lower than the year before. In short – good news for sellers, not so great for buyers.

Quotable Value’s statistics further back this up. Auckland house prices are up by 11% over last April. Southside of Bombay, Christchurch is up 7.8% while Hamilton and New Plymouth recorded rises of more than 4%. Only Whangarei saw a decline, with house prices there down 1.8%.

Perhaps the most important trend to note from QV’s findings is this: some buyers are getting a little sick and tired of the high prices. Research Director Jonno Ingerson reports that the rate of price increases has slowed in Auckland, Hamilton, Christchurch and Dunedin.

With prices being high, buyers are increasingly considering telling sellers where to go. Many prospective sellers are also holding on to their homes for now as the Auckland Council’s draft unitary plan threatens to play merry havoc with house values.

Autumn photo Open2view house

The local cattle populace don’t look too impressed with the changing of the leaves. Check out more of Nalene Morton’s photos of this Levin property here.

QV also came out last week with another set of very interesting data. Those asking prices mentioned earlier? In most cases, forget about it.

Going through last year’s sales data, QV found that just 17.2% of sales were for above the seller’s asking price. A mere 6.2% sold for exactly what was asked, leaving a whopping 76.2% of houses selling for less than what the seller wanted.

Take the average asking price in Auckland of $610,628 last month. On the North Shore you can expect to get pretty close to the asking price, unless you’re one of the lucky 30% who sell for above that. In Papakura, on the other hand, prepare to settle for around 4.5% less. The entire article and accompanying tables are well worth a read.

Meanwhile, as this was being written, the Real Estate Institute of New Zealand released its own March figures.

What stuck out most were the announcements that the median house price hit $400,000 for the first time ever, and that March saw the highest number of houses sold in a month – 8128 – since May 2007, at the peak of the last housing boom. Auckland and Canterbury/Westland reached new records of $562,000 and $359,000 respectively.

What stuck out a close second were the comments by Chief Executive Helen O’Sullivan that sounded like a not-so-subtle message to the Reserve Bank. With Governor Wheeler and Bill English looking for tools to curb house prices, O’Sullivan was at pains to point out the stark differences between Auckland/Canterbury and the rest of New Zealand:

“There’s a real danger that the Auckland housing market is mistaken for the New Zealand housing market, and that regulatory decisions will be made on the assumption that conditions in Auckland and Canterbury are replicated across the rest of the country.”

“Supply shortages in Auckland and Christchurch continue to be the main factor in those two markets, resulting in double digit price increases and new record prices, while the number of days to sell reaches near record lows. Across the rest of the country while activity is picking up, price gains are far more modest. To illustrate this, five regions, representing 24% of sales in March recorded annual price increases of less than 1.0%.”

Guess what? She’s right. It would be silly to assume that what’s happening in Auckland and Canterbury is also going on elsewhere. It is, as we’ve always said, a two-speed real estate market. Blunt tools like loan to value ratios that might work in one area could do real damage to the property market elsewhere.

So with so much data and so many differing opinions, how can you decide what to do? Here’s one more link that might ease your real estate headache a little.

Properazzi Property Dashboard

Longtime property commentator Alistair Helm of Properazzi has developed the Property Dashboard, which takes all that data from Realestate.co.nz and REINZ, decides whether it’s a buyer’s or seller’s market, and presents it in a pretty, simple and pretty simple manner.

Best of all, Alistair calculates it by region as well as nationally. There’s no doubt Auckland skews the national data so it’s important to see how different things are in, for example, Gisborne, where the needle points all the way to the other side.

What the Dashboard, and all those other reports prove, is the property market isn’t black and white by any stretch. Look closely and you’ll find shades of grey (and perhaps red, and yellow, and brown).

The big question is: if the Auckland market is in need of correction, as some worry about, will it do so sharply, or will it just float down gently in a tequisous fashion?

February Property Report: the heat is on, real estate is busy too

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Open2view Mark Harris

There’s still some green land in Mark Harris’ part of the world, but it’s rapidly drying out. 

Checked the date lately?

Two more weeks and we’ll be one quarter of the way through 2013. A year that, so far, has been dryer than a cinnamon-eating contest during a James Bond movie marathon.

Activity in the real estate market, however, hasn’t even come close to drying up. If anything, it’s getting hotter. Perhaps it’s thus appropriate that I’m writing this in what is, at 27.1 degrees, currently the hottest city in the country. If anyone sees autumn around, tell him New Zealand misses him very much and we would like him to come home.

Right then, onto real estate:

From REINZ

(Temperature update: 27.2)

As we previously noted, January was a busier January than usual. Would this trend continue into February and beyond? Seems the answer thus far is mostly yes.

REINZ this week released their monthly update on Tuesday. Among their findings:

  • 6632 houses were sold last month, up 7.5 percent on February 2012.
  • Fewer listings, however, means the rate of growth is slowing; this 7.5% growth in sales volumes pails in comparison to the 34.4% jump between February 2011-12.
  • The median house price is $382.000 – up 7.6% on the same time last year, and getting closer to the record set last December.
  • Auckland’s median shot up to $535,000, while Canterbury/Westland reached a record $355,000.
  • We also asked last month whether the popularity of auctions was waning. We have our answer: 37.1% of Auckland sales were done under the hammer compared to 21.2% 12 months prior. Nationwide, the percentage jumped 80% between February 2012 and 2013.

There’s plenty more to read in the latest REINZ Residential Report – print it out from here, stick it in a plastic pocket and read it in the pool.

From Realestate.co.nz

(Temperature update: 27.6)

The NZ Property Report from realestate.co.nz also suggests a hot market:

  • The truncated mean asking price rose by 1% to $443,734. This differs from the REINZ figure in that it removes the outliers (that is the top and bottom 10%) and calculates from there how much people are asking for their homes. And with it being a sellers market, people are getting what they ask for and then some.
  • This large high over Auckland is caused by the continued lack of new listings. While we saw a decent number last month, with 13,145 houses coming on the market, this is still 2% lower than February 2012.
  • And with this news, we hit an all time inventory low. If Rob Muldoon rose from the dead and installed a house-listing freeze tomorrow, we’d sell out of properties in 26.2 weeks.

To see conditions in your region check out the full report.

 Open2view South Taranaki truck

Exhausted, a truck passes out in the Taranaki heat. Photo by Michelle Hoffmans.

From Auckland Council

(Temperature update: still 27.6 (plus warm air from fan = 28))

Auckland house buyers have been doing it tougher than most (though still managing to do it). Not to worry, said Mayor Len Brown last month – there’s enough land available inside the city to build 15,000 houses “right now”.

Seems “right now “ means something quite different in bureaucratic-speak. The reality is, as the Mayor admitted this week, we have just 2000 sections ready to build on, plus capacity for 15,000 more on undeveloped greenfield sites.

This requires much more work than building on brownfield sites – previously used land that can be redeveloped for residential dwellings. It’s enough to make you want to slip slop slap somebody.

What this means, in short, is we still don’t have nearly enough developed land to build all the houses we need.  New Housing Minister Nick Smith says Auckland needs to double the amount of land available to build on.

Meanwhile most of the Council is invested in their plan to intensify building in already existing suburbs. But even they’re subdivided on this; Dick Quax is firmly against high density housing, while deputy mayor Penny Hulse thinks it can be done well.

If you enjoy a good scrap, you may want to keep an eye on these greenfield versus brownfield battles. Although, with this drought, it may soon be impossible to tell which are which.

From you?

We just hit 27.7 so that’s enough from us. Is the property market too hot for you? Should Auckland be building outwards or upwards? Drop us a comment below or over on our Facebook page. No sweat.

January Property Report: real estate remains real busy, the wisdom of homeowners, and why LVRs are no good

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Open2view #285324

So how did you spend your summer holidays? While most of us took advantage of the golden weather, more folk than usual decided to indulge in some real estate instead.

What does that mean for the market? Let’s take a closer look, shall we? (It’d be kind of anticlimactic to say no.)

Wishing you a Busy New Year

The January edition of the NZ Property Report provides us with the following factoids:

The seasonally adjusted asking price rose 4.2% to $440,507; this is up 5% on January 2012. For just the second time in history the asking price in Auckland exceeded $600,000 – 12.4% higher than same time last year.

8,849 new properties came onto the market in January, up 3.6% on the same time last year.

Inventory has stabilised at 29 weeks nationwide. This is still below the long-term average of 39 weeks, and Auckland and Canterbury continue to be affected by heaps of demand in relation to supply.

For more information and data for your region check out realestate.co.nz’s Unconditional blog.

That awkward Auckland moment…

Early in the New Year, a crafty Auckland housebuyer consulted his calendar, rubbed his hands together and thought “maybe I should get in on the property market while everyone else is out swimming and having barbeques.”

Alas, at his first open home he discovered a whole lot of other Aucklanders had exactly the same cunning plan – resulting in an extremely busy month for real estate and a lot of sossies going to waste.

Barfoot & Thompson, Auckland’s largest real estate firm, reported its biggest number of January listings (1440) in five years and the most January sales in six.

Those 820 properties sold generated an average price of $600,754 – down on December but the first time over $600,000 in any January.

So will this unusually busy start to the year continue on throughout the, uh, year? Our photographers have definitely been busier this summer, so February’s stats will be read with great interest.

LVR: Leave Vendors (un)Regulated

More evidence that talk of imposing Loan Value Ratio limits (LVR) would punish the wrong people:

Liam Dann, Business Editor of the New Zealand Herald, wrote a very compelling piece on the issue of LVRs and how they would hurt young people seeking to buy their first home. Said Dann,

“[Russel Norman] argues that the introduction of LVRs would bring house prices under control, and that would give the Reserve Bank room to cut rates further and that would bring the dollar down. This seems a huge leap of faith.

“Putting rules around the size of deposits required to buy a house won’t bother those who’ve already got cash or have plenty of equity tied up in other properties, although it will certainly make getting on the property ladder harder for those on lower incomes.

“The powers of supply and demand are strong and where there is serious population pressure they typically prove stronger than regulatory forces.”

Dann also points out that China, a country where the state can do pretty much whatever they want, has only achieved limited success with LVRs.

Sure, LVRs would require banks to be a bit tighter with their money, but the big issue with the housing market is a lack of supply, something all the major political parties are making plans to address.

Home buyers – first timers and otherwise – have a form of self-regulation that will stop most from borrowing more than they can afford. It’s a little something called common sense.

It makes perfect economic sense to borrow money while interest rates are low – as they are now – but when rates increase, as they inevitably will, the strategy then is to do one of two things:

  • Save a bigger deposit and thus reduce the amount of interest paid, or
  • Fix the mortgage rate before it floats above their heads.

With some economists predicting mortgage rates to eventually rise up to 8-9%, prices will flatten and demand will dampen. Such is the way of the world.

The Reserve Bank is investigating several ‘macroprudential tools’, LVRs among them, and they’ll report back in March. Here’s hoping fairness prevails.

Over to you

So what do you reckon: are LVRs the way to go after all? What would you do to bring Auckland back into line? Is Auckland out of line in the first place? Or should we all just throw in the towel and go swimming?

Let us know your thoughts below or on our Facebook page.

November property report: it’s not the end of the world; a defence of home buyers, and much more

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Mayan Calendar

December 2012 has arrived and, with it, warnings of impending Armageddon. Yes, some real estate commentators are doing their best Mayan impressions as they beat the drums of doom ever louder.

We are pleased to announce to homebuyers and sellers that, while the property market in Auckland is still hot, the world is not about to end.

 

House prices and inventory: Apocalypse nowt yet

November’s NZ Property Report from Realestate.co.nz suggests there is no flood of properties on the horizon.

Listings were up slightly on last November, and a whole lot on October, but it was still no match for buyer demand. The end result: inventory levels nationwide have dropped to 28.7 weeks – its lowest point in five years. The pool in Auckland is especially shallow with a new low of 15.5 weeks.

Some good news for buyers however: the mean asking price dropped in Auckland (by 2.5%), Wellington (4.2%) and Christchurch (2%). Overall the nationwide mean rose by just 0.2%. Auckland flies well above the average at $596,759, which reinforces what we’ve been saying for a long time – it’s a two-speed property market.

 

Auckland and the rest: galactic misalignment

QV’s Property Report liftout, in last Monday’s New Zealand Herald, is further proof that the market outside Auckland is not about to explode.

Median sales prices in the third quarter of 2012 in the North Island show increases in eight of the 17 regions – four of those are in the Auckland area – while another eight have dropped. One of those is Manukau City, which is down 5.6 percent compared to the second quarter. Tauranga remained unchanged.

But the market’s now hotter than it was in during the peak, some claim. This nifty excel-created graph (click for a closer look) says it all about that:

 Median house prices compared to 2007

Yes, nationwide values are up 1.1% on 2007, but one look at the graph makes it pretty obvious where the upward pressure is happening.

REINZ statistics out today show 40% of real estate activity last month occurred in the Auckland region, with a median price 40% above the nationwide level. Other than Auckland, Otago and Wellington are the only regions above this line.

Might other provinces feel some trickle down? Said Bruce Norris in the Herald: “in the last boom, investors took their money to the provinces when Auckland began to get out of reach… [but] there are no signs in 2012 of a similar pattern.” Perhaps investors haven’t had quite their fill of Auckland just yet.

Another difference between the boom period and now is the number of houses being sold. In 2007 over 10,000 houses were being bought every month; today we’re seeing around 6000 sold, which is still better than the roughly 3000 each month in the dark period that was 2008.

 

Interest rates: down for the Long Count

We feel homebuyers need some defending. The Auckland problems are an issue of supply, not demand.

Our floating rates of around 5.7 percent compare most favourably to the double figures buyers were paying just four years ago. Would it not be the rational thing to do, when presented with such a deal, to at least look at buying a home? If banks are fighting for your love, why wouldn’t you enjoy the attention and the resulting great deal?

Loan to Value Ratio limits, as raised by others, would punish first home buyers for something that is clearly not their fault. Philip Macalister in last Sunday’s Herald agrees.

The inevitable rise in interest rates will dampen the Auckland market eventually. When, and by how much, remains to be seen. The Reserve Bank Governor has to reconcile housing inflation in Auckland and the lack of life in the rest of the economy.

Graeme Wheeler kept the Official Cash Rate at 2.5% last week, but included in the December policy statement was this possible hint of a warning:

“Higher house price inflation and increased household expenditure would likely lead to higher inflationary pressures than is currently projected… All else equal, such a development could necessitate a higher OCR.”

Most economists suspect the OCR will stay where it is for at least a year, but it’s clearly Auckland’s housing inflation has not gone unnoticed by the powers that be. We will be watching Dr Wheeler very closely for any blink, head movement, muscle spasm, or anything else that might indicate a looming OCR change.

 

A calendar you can trust

Open2view calendar

We take hundreds of thousands of photos every year here at Open2view. Each December we take a dozen of our favourites and make them into a house-shaped desk calendar.

Unlike the Mayan calendar, our one actually makes it all the way to New Year’s Eve – and right now we’re giving away 31 of them. If you live in New Zealand, send an email to socialmedia@open2view.com with your name and address by Monday, and you’re in the draw.

So what do you think – is Auckland a growing bubble that will doom us all? Or is this about as likely to hurt us as the Y2K bug? Share your prophecies in the comments or on Facebook.

October’s property report election edition: the real estate market, Auckland and Christchurch, and home affordability

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What do Barack Obama and Mitt Romney have in common with many New Zealanders? They’re all paying big bucks to score a house.

Here are the biggest pieces of real estate news from October, complete with topical (at least, until tomorrow) subheadings:

 

Property market: Fired up, ready to go

Realestate.co.nz’s October NZ Property Report represents the midpoint of the ‘spring surge’. This is not some Afghani military plan but rather the big influx of listings that always follows winter.

Do the figures ever reflect that: October had 12,688 new listings – up 14% on September and, more significantly, 12% over last October. The sharpest increases were in Taranaki (up 68% on last October) and Hawkes Bay (+34.1%).

So more supply should mean lower prices, right? Not so much. The national mean asking price reached $445,529, up four percent on September and five percent on a year ago. That’s the highest price since realestate started collecting this data in 2007.

On the inventory front the market is heading back toward its long-term average of 39 weeks; right now it sits at 33 – nine percent over September. This is still 19% lower than last year but, with November being one of the biggest listing months, we can hope for a big bunch of new properties on the market soon – which would be good news indeed for buyers.

 

The big centres: Our blue and red states

Auckland and Canterbury are in a world of their own thanks to limited housing supply and plenty of demand.

Look no further than the asking price for proof. Last month Auckland passed the $600,000 mark for the first time and Canterbury broke the $400,000 barrier.

Listings are rising slower than the national average; Auckland and Canterbury went up by 5.6% and 8% respectively. Inventory levels sit at 19 weeks up north (12 weeks below the long term average) and 23 weeks down south – 10% down on this time last year.  Very much a sellers’ market then.

Now for some better news for buyers: building consents in September, says Statistics New Zealand, were up by 22% over the same time in 2011 and 45% over 2010.

Most new dwellings were approved where they are needed most: Canterbury – and mainly Christchurch city – with 174, followed by Auckland with 152.  While this number could always be higher, it is trending in the right direction.

Housing New Zealand has just released a plan which might help further still. Their plan for a medium-density apartment block on Manchester Street, to be one-third owned by HNZ, could be rolled out in other areas if successful. The plan, as reported in the NBR, is definitely worth a look.

A detailed analysis of the ‘battlefield states’

Housing affordability: Yes we can!

Meanwhile, last week the Government announced its response to the Productivity Commission’s home affordability investigation. Their proposal includes the following wishlist:

  • Fewer costs and delays – medium-sized housing consents are to be processed by councils within six months
  • More land supply – councils are to make more land available for housing both inside and outside city limits
  • More construction – government will investigate ways to increase productivity in the construction sector by 20% by 2020

Reaction has been lukewarm. TV3’s Duncan Garner calls the changes “underwhelming”, while Hugh Pavletich, who co-authors the excellent Demographia housing affordability survey, is most frustrated at the lack of concrete ideas. Our friend Alistair Helm, on his new and excellent Properazzi blog, has some thought-provoking ideas on this issue.

Government needs to be careful; to do anything that would cause a price crash, leaving mortgage-holders with their heads under water, is too reminiscent of 2008 to dare contemplate.

Many would like an economy that isn’t all about property – but that doesn’t mean killing real estate as an avenue altogether. After all, what are the alternative investment options? Finance companies?

The plan must be to increase supply to satisfy demand. If politicians try to assist home buyers without improving the supply side then nothing will change; prices will still rise as buyers uses the extra money to outbid each other.

In the meantime people are taking the situation into their own hands. Kiwisaver withdrawals for first home purchases quadrupled in the year to 31 March. And in a remarkable success story, this 22 year old Nelson landlord has just bought his second property.

And let’s not forget this point: low interest rates are bringing more and more first timers into the real estate market.

 

What all this activity shows is clearly the American New Zealand dream is still within reach. We’ll be watching to see if these home affordability measures will – in time – help even more kiwis step onto the property ladder.

Do you approve this message, or have you got a different philosophy? Cast your vote below or on our Facebook page!

September’s property report in short

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A family of ducks waddle off to another open home.

Spring: a time for flowers, cute baby animals and daylight savings, as we say “good riddance” to the cold and hit the warm(er) months.

It’s also usually a time for more property listings and increased real estate activity. Last month showed little change from August however: September reinforced the fact we have largely a two-speed house market, with demand exceeding supply in our two biggest cities and activity less heated, though still pretty busy, elsewhere.

The market has a slight spring in its step

Listings did indeed increase with the change in seasons. The NZ Property Report from realestate.co.nz shows a whopping 7.6% increase on August (boom!), though this is up on last September by just 0.3% (aww). These few extra listings did nothing for Auckland’s inventory level, which dropped to a new record low of 17.5 weeks.

The asking price nationwide dropped by just 0.3%. Wellington and Canterbury rose a little while Auckland dropped slightly. More fun was to be had in the regions; four of them rose by over five percent, with Coromandel (9.3%) and Nelson (10%) topping the table.

There was also a leap in lifestyle property listings – 29% up on August and 8.3% over last September. An opportune time to mention that if you’re interested in finding a lifestyle property, Open2view’s search engine makes it easy as.

For more on what’s happening in your area check out the full property report.

Season of new life (and one notable death)

Our banking sector was quick to dance on the grave of the National Bank – although not its dearly departed horse, Cody.

Advertisements have been popping up all over the place to entice unhappy National Bank customers to change teams. It’s just another reason why the great Mortgage War of 2012 looks set to rage well into next year.

Case in point: on Monday the BNZ lowered their 18 month fixed mortgage rate to 5.25%.

Then on Tuesday, ASB also went and cut their home loan rate. But wait, there’s more: fix your mortgage for two years and not only will you be charged 5.25%, but ASB will also give you a free Samsung Galaxy tablet and up to $1000 cash.

Could ASB’s free gift+cash offer be the start of a trend? It could serve as a way for banks to cut their rates by less while still dangling a tasty carrot in front of potential customers. Time will tell.

Affordability forecast: lots of wind but mostly fine

Even with the Mortgage Wars still raging, home affordability has taken a hit as rising prices blunt the effect of those low low interest rates.

The median house price in New Zealand jumped from $361,000 to $370,000. It now requires 53.5% of a single after-tax income to service an 80% mortgage on a median house – up 1.2% on July.

It’s still pretty sweet for first timers however – affordability there only decreased 0.2% on July. If spending 45.1% of a median income on a lower-quartile house sounds steep, remember it took 64.7% just four years ago. For all the ‘new house bubble’ talk that still comes up from time to time, in many ways we’re far off where we were just five years ago.

We recommend checking out the full Roost Home Affordability Report for August and its companion report for first home buyers.

Fresh out of spring metaphors

In conclusion there are few surprises: more listings are on their way and Auckland and Canterbury are still where most of the action’s at. As we’ve been saying since this blog started, it’s a great time to get on the property ladder.

Mind you, we also said in that first blog post that interest rates “must go up at some point”. They will – just not, it seems, for a long while yet.

In these conditions, the next few months will see business blooming. (Ah, I knew I could find one more bad spring-related pun!)

 

UPDATE:

Massey University just today (9 October 2012 AD) released the latest of its quarterly Home Affordability Reports. It’s a valuable bit of information which shows affordability, according to their calculations, improving everywhere except Auckland. Even then, Auckland only deteriorated 0.4% over the past year.

Nationwide, the national affordability index dropped by 4.9% since this time last year and 2.8% since the last quarter. This index is dictated by median house prices (up $1000 this quarter), the average wage (up $6.25) and the average monthly mortgage rate, which has dropped from 5.99% to 5.84%. The latter two factors more than canceled out the house price rise.

For more details on how your region is doing, just click here.

August’s Property Report in (not as) short (as usual)

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We know what you’re thinking: “August is so last month, dudes”. There was, however, some very interesting news coming out of winter’s final month. This should come into play in what is now officially spring, but so far resembles something the Mayans might’ve dreamt up while especially grouchy.

Onward:

Strong end to winter suggests strong start to spring, funnily enough

The always-superb NZ Property Report from realestate.co.nz reminds us that the peak property season is here. If August is any indication of what’s to come, it’s gonna be busy.

The truncated mean asking price rose slightly to $430,443 – just a 1.7% increase from August 2011. Twelve out of 19 regions recorded increases, with Auckland hitting a new high of $585,482. It might have been higher still if listings hadn’t also risen; the 10,365 new properties on the market is the highest increase since May.

As for sales figures, at 6035 this was up 16% on last August according to the Real Estate Institute of New Zealand. They also report a 4.2% increase in the median house price on last August, with the figure now reading $370,000.

To avoid confusion, this differs from realestate.co.nz’s figure in that the truncated mean is the asking price from new listings only – still a very useful way of determining how the market’s trending. For the stats geeks, here’s a little more info on how this figure is arrived at.

Overall it’s looking like a ‘sellers’ market’, but for reasons outlined below there’s plenty of reason for buyers to get in on the action:

Mortgage wars and home affordability

The Roost Home Loan Affordability Report for July, released last week, shows home ownership becoming ever-so-slightly more attainable. It takes 52.3% of a single after-tax income to service a typical mortgage – down from 54% in June. Conditions for first home buyers are the best they’ve been in eight years; to service a lower quartile home loan it’ll take 21.4% of one’s median after tax income.

So, why? The drop in the median price helped (down $11,000 to $361,000) but perhaps the most important factor, in the medium to long term, is that the banks are all locked in a crazy mortgage rate war.

Their prize is your custom, and they’ll use any weapon at their disposal to win you over. These include, says Bernard Hickey, “a variety of discounted fixed mortgage deals that include discounted legal fees, lower interest rates for borrowers with high equity and, in some cases, the discounting of break fees.” As Roost’s Colleen Dennehy observed in the same article, banks’ offers to borrowers aren’t as ‘one size fits all’ as they used to be.

One very interesting outcome from this is the movement of many customers from floating to fixed mortgages. The value of fixed mortgages has jumped $8.3 billion in the three months to July, while floating mortgages have declined by $6.6 billion. That’s because, if you sign up for a fixed rate for two years or less, you can get often get a rate lower than the floating one.

How long will all this last? Well, most experts’ projections suggest the Official Cash Rate – the force that drives interest rates up and down – isn’t going up until at least mid 2013. Maybe even the year after, if the economy doesn’t get its A into G. Mortgage rates will likely, although, not definitely, remain low if this is the case.

Good news for Canterbury

One more interesting development to keep an eye on: last week Statistics New Zealand announced a 7.1% increase in residential building activity in the June quarter – much improved on the previous quarter’s 1.4% decrease. A great deal of this new activity is taking place in Canterbury where it is, obviously, sorely needed. Long may this trend continue.

Conclusion           

If you’re thinking of listing and haven’t yet, you oughta. Prices are good, listings – although on the increase – are still low and demand is high.

As for buyers, the banks will be fighting for your love for some time yet, which makes it a pretty exciting time to be a house buyer. Just don’t go over committing yourselves!

Finally: while listings could be higher, they are on the increase, which means there’s more variety available to choose from. And of course – and give us points for saving the plug until the end – you can find all the best properties on our website!

July’s Property Report in short

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Olympic rings London 2012

House prices are barely rising, so no need to pawn off any rings just yet.

With Realestate.co.nz’s head guru Alistair Helm out of the country last week, there has been much thumb twiddling while waiting for their NZ Property Report to be released. Once it was, I tried squeezing so many Mars and Olympic puns into it Tongariro tried to end the pain and blow itself up.

Sorry. But hey, don’t say we didn’t warn you.

So here’s a quick pun-free look at the always excellent NZ Property Report and other bits of real estate data for July.

The big news was the number of new listings. While there were fewer than last month, the 9411 new houses on the market represents a 5% jump on this time last year. This led to an increase from 29.8 weeks of inventory to 31, still well below the long-term average of 40. Winter is the quietest time of year for the real estate market, but the call for more listings has been ongoing and sellers are responding – and that’s good news for house buyers.

Nowhere is this more needed than those eternally heated markets, Auckland and Canterbury. With just 19 and 18 weeks inventory respectively, they remain strong sellers’ markets. Auckland had 10% more listings last month than July 2011 – and yet inventory is still 25% down for the same period. Expert diagnosis: people really like living in Auckland.

Meantime, the asking price rose just 0.8% to $429,181. Sitting well above the national mean is Auckland (up 3% to $574,932) and Central Otago/Lakes (down 2.1% to $505, 294). Canterbury only rose 0.9%, but this was still enough to hit a new record of $393,433.

So what does the immediate future hold for house prices? Likely more of the same. With inflation low, and the exchange rate high, the Reserve Bank has no appetite to raise the Official Cash Rate. Dominick Stephens of Westpac, taking over goatee duties from Bernard Hickey, reckons we may have to wait until at least July 2013 for that.

Our Aussie counterparts yesterday left their cash rate at 3.5%, following four drops since November. Simply, there is no clamour in our region for a raise.

Banks are therefore not particularly bothered about putting up mortgage rates; in fact, on Monday, Westpac dropped theirs to 4.99% for those with more than 20% to deposit.

So while they say it’s a sellers’ market – and they’d be right – there is still plenty in there to keep buyers interested. And interested they are. Before anyone tells you there’s a bubble, however, consider this: mortgage debt, according to the Reserve Bank, increased just 1.8% in the year to June (click on ‘Historical data’ in that link). Compare this with the big boom of last decade, where we regularly saw annual increases of between 15-17 percent, and you can see people are now being far more sensible about taking on more debt.

Whether you’re thinking of buying or selling, it’s not a bad time to be in the market. So let your Curiosity get the better of you, give your local agent or broker a ring, rove around those Open Homes and go for gold. Sorry.

June’s NZ Property Report in short

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Cat styled calendar June 2012

July the first. A date famous for the invention of sunglasses in 1200 – thanks China – and the introduction of the Sony Walkman in 1979. In 2012, it will be known as the day Realestate.co.nz released its NZ Property Report for the month of June.

And what an interesting month it was for real estate. The winter months are not always a popular time to list, yet vendors made a mockery of that theory in May. June, however, saw a big reversal: the national inventory is now at a four-year low. Basically, if there were no more listings, we’d be out of houses for sale in just under 30 weeks.

Better news on the asking price if you’re a home buyer: the mean has dropped over $11,000 from May to now sit at $424,315. Across the regions house prices mostly dropped or stayed steady, which is weird considering the lack of supply. Overall, when seasonally adjusted, the last 18 months has seen a steady, rather than rocketing, price rise – although there are cases of some of our properties selling for far above the asking price.

To the main centres, as Jim Hickey would say:

Auckland’s asking price, at $555,594, is down 4% from last month but 2% up on this time last year. People are still nervous about listing as inventory stands at 18.1 weeks – up on last month but still down 31% on May 2011. Wellington and Canterbury are seeing their respective asking prices remains steady, while listings are not enough to increase inventory.

Unconditional has all the tables and graphs you could possibly want. Definitely check them out for the full report.

Something else from the weekend: Olly Newland, over at interest.co.nz, is predicting rising house prices and suggests first home buyers should “borrow till it hurts” to get into the good suburbs.

Not sure if anything should be done until it hurts too much, but with super low mortgage rates still available it’s a great time for first timers to get on the ladder. It doesn’t have to be in the exclusive suburbs, have views of Everest or contain 23 bathrooms either. It’s called a ‘property ladder’ because it’s meant to be climbed.

We certainly agree it’s a good time to buy as well as list, so pop on over to Open2view.com (now with new improved front page!) and see what’s on offer.

UPDATE: I wrote all this on Monday and – as is the way – some more info was released this morning on housing affordability.

The latest Roost Home Loan Affordability Report reckons it now takes a little bit more to pay the mortgage, due to a $4000 increase in the median house price. It now takes 53.6% of a single after tax income “to service an 80 per cent mortgage on a median house”, up from 53.1%. So it’s slight, really. And with interest rates still low, we agree with the Herald that “affordability for young working couples remained near its best levels in almost eight years.”

UPDATE 2: Oh yes, July the first was notable for something else – the launch of Open2view’s Be Prepared Month. If you haven’t entered our competition for an emergency Grab and Go Food Kit, head to our Facebook page and go for it!