Real estate pundits sing mainly from same songbook

There are various sources of information about the residential property market - Quotable Value, REINZ, independent agencies - which can sometimes be confusing to the potential buyer or seller seeking an answer to the question: "have we started to emerge from the recession yet?".

Reading the latest report on the property market can be an uplifting or a deflating experience, depending on which report you choose to go by.

For example, today saw news from industry website realestate.co.nz that the traditional Spring seasonal spike in listings hasn't happened this year.

Their New Zealand Property Report showed listings are up only 7 per cent to 13,550 - compared to a 21 per cent rise at the same time last year and 16 per cent in 2007.

With the beating that the property market has taken over the last 24 months during the global financial crisis, this modest bounce is hardly surprising news.

And Bernard Hickey of interest.co.nz had a cautionary note [see link at right] for those considering buying an investment property: beware of the effect of interest rates creeping up - and make sure your future income (from wages and salary) is secure.

On the upside, the positive news, however, is that the latest property market reports share a common theme - prices are beginning to firm up, listings are increasing and the number of sales is also on the rise.

The state-owned Quotable Value (QV) stated New Zealand house prices recovered last month to be close to levels of a year ago, supporting views the economy has emerged from its longest recession in more than 30 years.

Quotable Value's residential house price index fell 1.1 per cent in the year to September, compared with a 2.8 per cent decline the previous month - the sixth month in a row the trend in property values has improved.

The government agency said there were signs of more activity in the market with an increase in the number of sales and more listings in many areas.

The monthly QV residential price report 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.

The Real Estate Institute of New Zealand (REINZ) provide information from their monthly Housing Price Index.

The Index increased by 1.9 percent to 3230 between August and September. (Its highest point was 3400 in late 2007 - the end of the 'boom'. It had threatened to dip under the 3000 mark in January this year.)

In the three months to September this year, housing prices increased by 2.5 percent. Compared to 12 months earlier, the REINZ Housing Price Index increased by 5.3 percent. Housing prices are 4.4 percent below their November 2007 peak.

In the Auckland region, housing prices in September were 9.0 percent above those in September 2008 with housing prices in Wellington (up 8.7 percent), Christchurch (up by 10.2 percent) and other South Island (up 1.5 percent) also up. By contrast, other North Island suburbs housing prices were down from the year earlier levels (down 0.3 percent).

The REINZ Monthly Housing Price Index is put together using a technique known as stratification; basically it is an average of sale prices for common groups.

Financiers also watch the industry closely.

Mike Pero Mortgages chief executive Shaun Riley said last week that growth in house sales held firm in September at 39 per cent a year.

The median house price rose to $350,000, up 6.1 per cent on September last year, and just 0.4 per cent below the peak recorded in November 2007.

The time taken for houses to sell, eased to a two-year low of 33 days in September, one day fewer than in August, he said.

So, what are the people at the coal-face - the agents themselves - saying?

Figures provided from agencies' own research perennially paint, unsurprisingly, a glossy picture of the state of the market as an investment option.

Barfoot & Thompson provide monthly summaries of the market, based on their own sales data.

According to their reports, there were clear signals about two months ago that demand for houses was outstripping supply - a clear call for potential vendors to give their real estate agent a phone call.

Listings with Barfoots, Auckland's largest real estate company, were recently (August) at their lowest point since December 2007.

The high-demand $400,000 to $600,000 price bracket was experiencing an "acute shortage" of homes, agent Dianne Nicholls said in September.

In their latest report, the Auckland housing market is "settling down", said Barfoots, as they announced a rise in listings last month compared to August.

Barfoot & Thompson said it sold 917 homes in September - the second-highest monthly total for 2009 - at an average price of $514,890. The price was 3.8 per cent up on a year earlier.

We even get some international comparisons.

Real estate consultancy Knight Frank operates a global network, including US based Newmark Knight Frank, encompassing 207 offices in 43 countries across six continents.

Last month Knight Frank released its international house price index which compared house price changes in the second quarter of last year with the same period this year.

The news was pretty good for us - it showed New Zealand was ninth least affected out of 32 countries.

"It now appears that house prices are starting to stabilise across the world," said Liam Bailey, head of residential research at Knight Frank.

So things may finally be looking up, after all.

- NZHERALD STAFF