Be warned. Artificially low interest rates are a trap. A dollar of debt is still a dollar of debt. Houses need to return to their 2001 values at least before I for one will trust them. Prices of new sections need to drop a lot further than that. NZ-ers need to claw back from being one of the world's most indebted peoples, not go deeper into it.

We reinflate our housing bubble now, only at our longer term peril.

Phil, I don't think the bubble is about to be reinflated anytime soon, more likely to drift sideways for quite some time now (which means going backwards after inflation is taken in to account). I wouldn't wait for a return to 2001 prices, that's very unlikely to happen.

"On all three key indicators of houses sold, average price and number of new listings, February was positive and encouraging," Managing Director Peter Thompson said. - really? and I thought that a jump of new listings in such a market is a sign that there are many more sellers than buyers in the pipeline and this will put even greater pressure on prices.

Barfoot "forgot" to mention their overall stock listing - but rough calculation from last month brings it to 7600-7700 which translates to 13-14 months of stock.... yep, definitely the market is on fire....

Ha! Ha! While prices all around us are falling almost BARE FOOT - look in any supermarket, or even look at falling salaries in advertised positions in newspapers - it is obvious that the current house price boom is really a bubble. LoL

This article tells us nothing and has been used entirely for spin by B&T.

"The firm listed 1470 new homes, up 50.8 per cent on those listed in January". From which we can deduct a lot more people want (need?) to sell.

"The average price achieved of $512,536 in February is the highest average price ever achieved in a February, the highest average achieved in the past four months". From which we can deduct that a lot of people with expensive homes (and big mortgages?) are selling. Also, people with expensive homes are possibly needing cashflow due to other investments turning sour.

The REAL question is, all those houses that were sold, what was the market price for them 12-18 months ago?

I'll grant them that someone must be buying these places. But hell, if you're cash rich and debt free, and you feel like upgrading or maybe putting some cash into property in case inflation goes wild, and you can get a "bargain", whoops wrong word, I mean "fair-er price" (i.e. 30+% lower than 18 months ago), why not buy.

What you cannot deduct from this report is that the housing market has turned a corner (i.e. and the the buy, flick and guzzle Chardonnay with your friends at BBQs because you just "cleverly" made a 20+% tax-free capital gain crowd is coming back) - that is pure spin.

Sam_M I agree.. my mother thinks I should buy as well.. Seems to think you can't lose..

We can't be better than the rest of the world..

My gut instinct says dead cat bounce

Dean

hahaha i just love these real estate guys... they just love to blow out the statistics... after all they have to make a living too!!!.. as someone mentinoed earlier, can B&T show the market value a year ago for the sold places??? we'll know the true story when QV results are out next week... isnt it surprising that because their average sale price is 2% above last months, B&T has realeased their article on the 4th working day??? they usually get it out after the 5th working day!!!..

I presume that average sales price is increasing because the make-up of houses selling is changing - i.e., prices at the lower end of the spectrum are making up a smaller number of overall sales than they were a year ago.

If this truly is a turning point (and I simply cannot believe it is, housing is still fundamentally out of whack with long term trends) I'm not sure what will be worse. Missing the best buying time or living with my wife saying 'I told you so' for the next 20 years!

From the Guardian in the UK - of course this will never happen here in NZ.
Meanwhile, the Land Registry said January's price fall was the seventeenth month in a row where the annual rate of change has fallen, in contrast to 21 months of uninterrupted increases between December 2005 and August 2007.

Howard Archer, chief UK economist at IHS Global Insight, said: "The Land Registry and Nationwide data reinforce our belief that the very surprising 1.9% month-on-month rise in house prices in January reported by the Halifax was an anomaly and house prices are still very much heading downwards

"While latest mortgage approvals data suggest that housing market activity may have bottomed out, and survey evidence indicates that buyer enquiries have picked up significantly as people are attracted by lower house prices and the Bank of England slashing interest rates, we are sceptical that sales will pick up substantially anytime soon and put a floor under prices."

And don't forget DeanA and Sam-M, a lot of households are finding our that they don't have property investment; they have property imprisonment.
Do your sums before you join one side or the other.

I wonder how many they sold in February 2008 compared with 2009 - that doesn't seem to be metioned above?

Oh, and by the way, I expect to see bankruptcies in the property development sector and sections on the urban edges being fire-saled for well under 100 grand. Which is what they should cost anyway if it wasn't for the racket being run between councils urban planners and land bankers, who actually bear a major part of the responsibility for these destructive asset price bubbles occurring in the first place. The central banks and the finance sector couldn't have done it without your help. It is a pity that you guys can't carry more of the suffering compared to the recent victims of your racket who face foreclosure now.

Maybe the real reason that Barfoots listed less homes last month is because they have increased their commission rates - yes I am not joking - increase fees in a recession and you are bound to get less houses to sell.

I am a 'buyer' with a very substantial deposit who is just watching the market for the next few months. I believe that New Zealand is 9 to 12 months behind what's happening the US and UK (having sold up and moved from the UK in mid 2007). We didnt buy then because we believed the market was well over priced for what was on offer

What B&T figures don't tell us are;

1. how many of these sellers are transfer's from other agents, I have seen a lot of this in the current market (over the last 15 months), where sellers are rotating around the different agents and we are seeing the same houses appearing with different agents

2. How long its been been on the market

3. How much has the price reduced since the house was originally placed on the markets for example - House I visited a year ago was on the market was $1m now selling for $795K (still wouldn't pay that for it)

I will stay watching no matter how much the agents tell me this is the lowest and they are great bargains, I firmly believe that the market still has a way to go down yet.

I also think many sellers who bought at the height of the market are sticking their heads in the sand and believing they will recoup their outlay, that someone will come along and pay the same price as they did in 2006/2007.

I know a few people who like me have the means to buy, are looking, doing the open homes, but staying out of the market for a while yet as they don't want to buy a house that potentially will be worth less in a years time

I agree that house prices must have further to fall, and suspect that Dosser's analysis above of the figures may have explained this 'aberration' quite well, however, there are always the aberrations.

A house, well, pretty old batch really (I'd pull it down) sold at tender in Le Bons Bay (Banks Peninsula) over the weekend for $550,000. It only had a GV of $368,000, and there were 58 tenders. Just goes to show .... I have no idea - perhaps buy by the sea (that's what I'm putting my hopes on :)

I think the 1st home buyers should be happy about the news as their purpose is diff to investors.

another false dawn promulgated by real estate agents who have over borrowed on their over valued investment properties and are facing ruin(I hope)

RadioNZ reported Barfoots as saying that Asian immigrants were buying?

For those of you wondering (and Barfoots would certainly not be rushing to tell you) their sales in February 2008 were 600, so todays sales figure is still significantly below that. However that figure was itself a recent February low in terms of volume. Their sales in February 2007 were 989.

So to recap February sales volume for B+T

2007: 989 houses sold
2008: 600 houses sold
2009: 559 houses sold

The rolling 3 month average for B+T data (a better measure) is up 4K to $508K. which is still below the rolling average for the months of October, November and December.

Recovery? Not really in terms of volume and not really in terms of price, and with winter just around the corner (and 1 remaining good month for sales - March) and unemployment jumping (pretty much 200 jobs lost a day at the moment - and thats just announced jobs, which would equate to 70,000 plus over a year) is it really likely that the B+T spin is correct?

So they sell 559 houses but these are replaced by 1470 new listings ... and that's good news? Another year of good news like that and they'll have the equivalent of Palmerston North on their books.
How does supply and demand work again?

They persist with trying to pull wool over the eyes of the public. I get the feeling they are desperatly trying to promote a bottoming of prices because they know volumes won't recover until then, yet all they are doing is delaying it by promoting false hope to the gullible. Wait untill winter and see how much confidence is in the market then.

Andy - they must be pretty worried as they have about 1,000 salespeople in 60 or more offices and in the latter part of any given financial year their top performing salespeople are paid 80% of the commission. See http://jobs.nzherald.co.nz/job/view/mv5fb1/

Given that the 80/20 rule means 200 of their salespeople would be doing 80% of the sales, cashflow must be very tight. They have grown their office network by at least 20 branches during the boom and must be feeling the burn right now.

I would not be surprised to see them close some branches or merge some together to save overhead although that would not be a good look.

A quick look at their website indicates they have increased the fees that they charge - in the case of a $1m home by about 20% so that's an interesting development in recessionary times!

I will only say this once. I used to be Brent on this website but as there is another Brent I now go by a new name. It is sure to annoy people over time, calling me faceless etc like all the real estate agents, bankers and politicians blogging here. I do have a face - that of a low key property investor, 11 properties in all and a monkey to suit. the idea of falling interest rates and increasing property sales does appeal to me, so being careful not to be to sucked into what i want to see i say this -

properties are starting to move again, yes there is an oversupply, but it will in time be soaked up by all the buyers that are sitting on the fence. fences can only hold people with intention for so long, as it is an uncomfortable place to sit, sooner or later everyone jumps off as it becomes a wobbly and undesirable position.

i seriously believe this to be true, to the extent that i would be interested in becoming one of these real estate agents, although the idea of banging open home signs on street corners at 6am on a rainy saturday morning puts me off, along with not being able to spend precious weekends with my family.

B&T paint a rosy picture, but anyone with half a brain knows the majority of people in this world need a reason other than their own to make a decision - so it can be that others are buying, the home is facing the sun, good school zone or whatever. do not beat up the agents for helping people to come to a decision just because you're hell bent on not making up your own minds or fixated to your ego and associated opinions.

just as some (Bernard Hickey excluded) change their opinions as things change or they become more knowledgeable, others will come around. I myself may change my mind if the independent research i filter through starts to change. personally i can see sold stickers going up and more than just agents attending open homes and that is the current evidence we cannot ignore.

given a 50 to 75 basis point decrease looming we might just see the dead cat bounce then just get up and walk away, given they have nine lives after all...

This question of increasing web traffic being a leading indicator of sales/improving market is an interesting one - Alistair over on realesate co nz has also been making this claim for the last 3 months or so.

In the UK in Nov/Dec/Jan various web based agents etc made similar claims ie that increasing web based traffic was the forerunner of a market turn around.

The UK housing market continued its death spiral in February (Halifax/Nationwide both show falls from peak of 20%).

Anonymous/Brent - how do you think an unemployment rate of 10% will impact the housing market?

Tony aLexander's latest

http://www.bnz.co.nz/binaries/w050309.pdf

he says forecasters of 40% declines have hidden away.... I can't recall who was predicting 40% decline, certainly not Bernard

I still can't really buy into his net migraiton gain argument in terms of propping up housing. Of course it will have some effect, but how much? Also I come ba kto the thought that why would poms and the like sell up now with 20% declines in housing and move downunder, especially when the labour market here won't necesarily be much better than the UK?
Doesn't stack up to me
Also still plenty of kiwis moving to Aus - two recently redundant employees from my office have packed their bags for Aus
Whilst their economy remains stronger relative to NZ I'm sure we'll see them keep flocking there

No worries A - I am a mainlander, LOL.

Barfoots' figures are contrary to QV's.

Which one has more credibility.......

the theory that increased website traffic as proof that things are improving is hilarious!
it is more likely to be a sign of all the underemployed punters out there's curiosity.MacDonalds are busier too...