Recovery? Don't bet the house on it

With so many different housing organisations around, it is sometimes difficult to know where to turn for accurate and up-to-date information. Photo / NZ Herald

A spring recovery or a year in the doldrums?

The housing market is all over the place if the reports from a throng of organisations lately are to be believed.

Our housing sector has a confounding array of statistics issued by many different outfits, each with their own agenda.

Every month about half a dozen organisations get lippy about housing, saying what they think the housing market is doing, why and what they expect it to do next.

All that get lots of publicity but most of them say different things depending on how they reached their calculations, what they measured, what time frame they used, whose interests they were serving and what audience they were aiming at.

Precisely who is right or wrong is up for debate. For renters, home owners and buyers, the picture is as clear as the view out a dirty window.

Most of us know the housing market is not in great shape right now but is it about to make the spring rebound being predicted this week by realestate.co.nz?

Do we have a looming shortage of housing as BNZ chief economist Tony Alexander also said this week?

Is now the best time to buy as the agencies say or should people hold off?

One thing many of the experts agree on: QV has the best data and is most trusted. And its latest data set shows the market picking up somewhat - or slowing down less.

The Economist uses QV in its international list of more than 20 countries and we're in the middle between The Netherlands and Spain in terms of price falls.

Not as bad as Singapore (-21 per cent in the last year) or as good as Switzerland (+5.3 per cent) but hovering somewhere in-between.

Many economists rank QV the highest in terms of accuracy and that says prices are down 8 per cent on a year ago.

UBS economist Robin Clements said the trade-off on the various statistic sets of data bases was always accuracy versus timeliness.

"QV is the final word on house prices but comes out with a long lag. QV's monthly ValueMap is more timely but doesn't perfectly reflect the quarterly data. REINZ is also timely.

"Its sales is a good lead indicator on consents but its median prices can be volatile compared with QV. Harcourts and Barfoots are even more timely on sales and prices but you have to recognise they are not the whole market," Clements said.

Business Herald economics editor Brian Fallow compares the many house price reports to flickering strobe lights in a nightclub.

"If you link them all together, you might get some idea of what's going on but it's not a calm or steady illumination of the scene," he said.

Each organisation can reach opposite conclusions about the market even within the space of four weeks.

At the beginning of June, REINZ said prices were dropping but sale volumes had picked up.

At the start of May, it said the opposite. Both were undoubtedly true, but what can be concluded from that?

HOW TO READ THE NUMBERS

This guide to the data-issuers in the housing, farming and construction sectors gives a spread of the range of facts and associated opinions being issued.

QV

Government or state-owned business which issues national house sales data on a monthly basis and breaks its data down regionally. It has an index which measures price fluctuations.

This organisation is the most bearish about the market right now, noting an 8 per cent annual house price fall. Data is compiled for the previous three months and the sale price is expressed as a pure average or mean price.

Real Estate Institute

Licensed agencies supply figures to the Parnell-headquartered national organisation which both represents and disciplines its members. This information's strength lies in numbers - thousands of agents supplying sales about to settle - until deregulation later this year when agents no long have to be REINZ members.

Then, the data set could be under considerable threat if agents abandon their lobby group. REINZ issues monthly statistics for rural and urban property sales and does this by calculating median figures. Unconditional sales from members are presented. The organisation tends to be eternally optimistic, like many real estate agents.

Barfoot & Thompson

Auckland's largest real estate agency which issues figures based on deals every month. It calculates sales based on average sale prices. Because it sells a third of the houses in the country's biggest city, experts are keen on these figures.

Harcourts

NZ's largest real estate agency with 180 offices issues monthly statistics in its MarketWatch and breaks these down into five regions with Auckland lumped into the northern region and no conclusive national figure. Records average written sales and claims moral high ground for deals achieved - rather than REINZ unconditional sales contracts.

Realestate.co.nz

Calls itself "the official website of the real estate industry", jointly owned by REINZ and a powerful band of agents: Barfoot & Thompson, Bayleys, Harcourts, Harveys, Ray White and L.J. Hooker.

This website-based business claims to have 94 per cent of all licensed real estate offices subscribing and posting listings. Chief executive Alistair Helm also has a regular blog.

Sheldons

This North Shore arm of the valuation business issues individual house price figures on settled transactions sporadically. These are not widely reported on but the valuers claim the moral high ground because they are the only organisation which measure like-for-like sales.

All other data sets are invalid, they say. They take about 20 houses in their area which sold a short time ago, perhaps in 2007 or last year, and then show the new price after they have re-sold recently.

Statistics New Zealand
No house sales but building consent data on a monthly basis shows the number of residential and non-residential consent applications, an indication of the health of the $12 billion construction sector. Also issues quarterly figures on building work put in place including additions and alterations, giving a bigger picture of actual building work done.

First National
One of the larger real estate chains has been sending out monthly data lately but mainly promotional rather than factual. The 75-agency chain this week noted strong interest from investors and first-home buyers but gave away no raw price data.