How are migration figures? Aren't many people from communist China cashed up?

Last week Barfoots said prices were up in Auckland..... someone is telling porkies.... I wonder who.

Hi Nelson

Year-on-year for Nelson was a 7.3% fall in the index in February and it was a 7.2% fall in January.

We're unable to calculate Nelson from peak at the moment sorry. We keep backdated National figures (hence we have been able to calculate and report the national index's fall from its peak) but do not at the moment for all of the various regions.

Will see if David can do some work on it.

The REINZ data may be a bit more useful:

http://www.reinz.org.nz/reinz/index.cfm?C0987AB9-F9D5-D36A-EED8-BAC1BA48...

Hope this helps some way,

Cheers

Alex

Si, The QV data is for three month end of Feb. by settlement date. The BT data is for one month by P&S agreements. So I see BT data as current data, and I see QV data as 3 to 5 months old (assuming settlement date is 6 weeks away from P&S agreement signed).

Russell

Yes, BT data is for Feb. 2009 and QV data is not. For house price and sales volume, you need to interpret data by yourself. My 2 cents is sales volume is increasing backed by low interest rates and traditional buying season.

Anyone bothering to look at where interest rates must end up, given the
worldwide demand for available credit for the next decade at least!
What would 12% fixed or floating do for property prices. Have you all forgotten
the seventies? I remember paying 16%.

I decided to go along to an auction at the weekend to see the "increase in buyer activity" for myself. This is a sample of 1 I know but it is a very interesting case because of the properties potential to generate positive income returns given current debt costs.

Property was a home and income (5 bed house 2 bed flat) in Hillsborough, Central Auckland (http://www.harveys.co.nz/detail.php?pid=MR6223). I estimate between 100 to 120 people were at the auction! Auctioneer asked neighbors to put their hands up - about 20 people did so lets say roughly 100 were there as interested "buyers". Of these roughly 40-50% were either of Asian or Indian ethnicity and seemed to be part of large family groups so I guestimate there were roughly 10 potential bidding parties. Side note: there were a few late model European cars parked amongst the people movers in the street for the auction.

The auction whittled down to four serious bidders competing for the property and then two final bidders. One looked like a white middle class NZ family and the other (standing right next to me) was a young Asian woman who was taking instructions on the phone from someone overseas the whole auction. The agent was so focused on her he ignored the other bidders - she drove the price up about $20-30k but then stopped abruptly. Sorry I forgot to see what type of car she left in.

The property sold for a price I estimate to be 4-5% down on its price of a couple of years ago but at a value that I estimate would give it a roughly 6% rental return - basically a neutral property. Following the auction I spoke to one of the neighbors who informed me that the owners had no choice but to sell in the current market and they had even brought the auction forward 2 weeks. In a sellers market (higher volume less stock quicker sale times) I personally think they would have picked up a $20 to $40k premium for the property. If the auction had been better run and the property prepped for market a bit better (roughly $5k) they may have picked up an additional $10 to $15k over that.

So what can we assume from this sample of 1?

Buyers are reengaging?
Migration is and will continue to influence property prices?
Prices have come down a little but appear to be "reasonable" based on rental returns and the fact buyers are not having to pay premiums over and above this to secure properties?
Sellers are being forced to sell at market prices?

The answer is that unless you own a very similar property in Hillsborough you cannot assume anything at all. I have been analysing RE market data for a living since 2000 and if there is one thing I have learnt it is this ...... you cant trust economists OR real estate agents. Economists always talk in national medians and averages and trend lines. Their hearts are in the right place and they love stats and analysis but only really at an aggregated level. They don't get out there on the streets to see what is happening in micro markets with their own eyes because not only is it physically impossible but it also demonstrates how misleading their beloved averages and medians can be. Let me know next time you have an economist knock on your door and offer to analyze the value of your property in your street and your suburb. Some would argue they are called valuers but we all know valuers ask RE agents what properties are worth, and RE agents ask buyers what properties are worth and buyers ask valuers what properties are worth and round and round it goes.

Don't get me wrong! You cant trust the RE agents either ....... they have an agenda all of their own that normally involves acheiving sales so they can make a living. The only person you can trust in all of this is yourself!

If you want to know what is happening in your market then analyse YOUR market and not the national market. Every property is unique and so analyse your property, on your street, in your suburb and then maybe at the most in your city before you analyse your country. Analyse your market in that strict order and then analyse yourself .... your income, your expenses, your savings, your equity, your debt and your appetite for risk.

Fill your left ear with economist advice and your right ear with your local real estate agents advice - filter both and then reconcile this against what you go out and see with your own eyes ... in YOUR market!

The result will be the most accurate picture of what is happening to the value of your assets in the market that you operate in!

the real points to note here are

1) interest rates are artificially low
2) unemployment has just begun its upward march
2) houses are crashing
3) what happens when rates return to normal and unemployment hits 8-9%??

EEK!!!!!!

Steve

You are clueless or deluded if you think Cullen was doing anything other than bolstering the strength of the state, good old fashioned socialism, embed that many services in the state machine that the citizens cannot extract themselves. The clueless were twittering on about how we couldn't afford tax cuts because the mysterious "services" would be cut almost as though it was beyond these persons ability to plan or care for themselves or their fellow humans.

Look at ACC, Schools, Councils all are now pseudo welfare departments, the cream of the crop was bludging for families, breed indiscriminately the state needs your dependance.

Neven

To get to 8% or 9% unemployment would we not have to have job losses of 2,000 or 3,000 per week? Anyone have any idea how many jobs are actually being lost each week or month since November? Surely it can't be thousands per week or we would be hearing about it?

Matt in Auck - would you mind sharing what industry you work in?

Any talk of training on that other day?