Here is some supplementary analysis:

a) Turnover at 515 was above Dec 08 turnover (461), but was below November 08 turnover of 546, just above October 08 (503) but below Sept 08 (559). We have been hearing much recently of increased interest in the market (and supposid increased sales from the usual Auckland agents) - but there is precious little here to suggest much of a recovery in turnover.

On a year on year basis the 515 sales is down about 16% from a year ago, and down a whopping 50% from 2 years ago.

b) Average price is down $7K (month on month) from December 08, or about 1.3% (Dec $509.5K versus $502.6K)

c) YoY the average price is down $15k ($517K Jan 08 compared to $502K Jan 09). Compared to the peak month (December 2007, value $559.8K), this latest January figure is down a whopping $57.5K or 10%.

d) But perhaps the most revealing is the rolling 3 month average, which comes in at $504.3K (Nov 08 $500.8K, Dec 08 $509.5K, Jan $502.6K). The previous 3 month rolling average figure (Oct/Nov/Dec 2008) was $510K which indicates prices are still falling.

That compares with the same months in 07/08 (Nov, Dec, Jan) when the rolling average was $541.2, a difference of $37K, or a fall of 7%.

Most interestingly is the comparison of the latest rolling average with the rolling 3 month average peak for Auckland, which came in the last quarter of 2007 (and included the peak month Dec 2007). The B+T average for Oct, Nov, Dec of 2007 was $550.9K, giving a decline of $46.6K, or $8.4% compared to the most recent 3 months.

Summary - Based on B+T data Auckland prices are still falling, turnover is still very slow.

Maybe I'm being a bit brutal but this fellow Thompson is really full of c#$p

The latest mortgage lending data is also just out for the week ending Jan 30:

http://www.rbnz.govt.nz/statistics/monfin/c16/data.html

In the last week lending seems to have returned to just below the levels seen in a typical week in November 2008 (with presumably similar turnover in sales). No evidence there of any surge in new mortgages being issued (or in value being issued) - in fact one could argue that these figures are pretty weak compared to, for example, November 2008.

It seems more and more likely that the blip up in mortage lending in the last 2 weeks of December was simply re-mortgaging ? (you did an article on it I think Bernard).

Big Bad Barfoot mentions that the number of listings with his company has fallen (and attempts to put some positive spin on that too). However - I wonder whether there is another explanation. Before the bust many Kiwis used to list their properties almost as a hobby (with speculative prices attached); they didnt really want/need to sell but were ever optimistic of hooking a overzealous buyer with an outsized chequebook. As a consequence agents used to (and still do) distinguish these non-serious sellers from serious sellers by adding 'seriously for sale' in adverts (hilarious I know). I wonder whether the decline in listings has anything to do with the final disappearance of this tranche of non serious sellers.

At any rate soon enough they will be replaced by a new tranche of sellers with a gun labelled 'unemployment' pointing at their heads.

oh well, waiting and watching can be fun too... particularly if you have moved out of kiwi$$!

Edmund,
Great to see you are a sceptical reader. We share your scepticism, but we believe here at interest.co.nz that sometimes it's worth seeing comments from people in their own words. Just straight.
Rope can be useful when there is enough of it for someone to use.

cheers
Bernard

If US trends are an indication, one might need a 30% deposit to buy that cow in future;

http://www.cnbc.com/id/28977233

Kate: Interesting. I guess a bigger deposit to buy your own cow means first time cow buyers have to keep buying farmers milk and so the cows stay on the farm.

Waymad: no sales = no income for any type of agent - houses, cows, antiques, stocks whatever. If sellers wont sell because they don't have to sell what choice does any type of agent have but to try convince buyers to buy? That's the market reality. If they could talk sellers down 15% to get the sale / market going again then that is what they would do because no sale = no income and no income = no fun. At the moment real estate agents probably make up a disproportionate number of the unemployed.

yes but a certain amount of people always do have to sell because life moves on through deaths and marriages and breeding and unemployment and change of employment etc etc etc... and when it does then staying in the same house no longer becomes an option. and when they these people so sell in a declining mkt, then the price they get is lower than expectations but they take the sale because the most important thing is to get the sale and move on with their lives. and whatever price they get becomes the comp for all other houses in the area and so prices in the area go down. remember those who might sell are in competition with those who have to sell.

but hey nione of this is so bad because if you're going to buy another house in the same mkt then whichever house that is has gone down in price also. and in a declining mkt house prices tend to flatten across quality so moving up the ladder from that three beddie to a four beddie has just got comparatively cheaper. so now a falling mkt has given you a chance to be better off.

and when this penny drops that falling house prices can be a good thing then you realize that unrealized profit isn't profit at all so forget what valuations you had in the past and had indeed banked in your mental bank account, the most important thing is what you get for your house vis-a-vis the cost of the house you move in to. and so it goes...

the only people who are going to lose out badly in this crash are those who seek to exit the mkt and who have paid somewhere near the peak of the housing bubble. they may well be forced to sell because of debt loading. and frankly, if they bought anywhere near the housing bubble peak then they weren't investing - as the return on investment was so poor, they were speculating - gambling on capital gain. and when their debt levels are unsustainable for staying in the mkt they lose their gamble. such is life.

Hey Bernard,

I love the new advert for Californication on your site. While reading the usual doom and gloom in this forum its quite refreshing to look up and see about 20 different sexual positions in full flight. Can we perhaps get some straw cows in the mix so the adverts dont detract too much off topic?

I have a number of friends that work in Real Estate on the North Shore and they are flat out. They have been since the OCR started to fall. From what they say Barfoot and Thompson are known in the industry for saying it as it is.
Another friend has sold their house and been trying to buy for the last 5 months. They have been missing out by about 5 -15K on each property they have had an attempt to buy. They are rapidly coming to the conclusion they will have to pay a bit more for a good home. From their perspective on the North Shore they have not seen the big fall in prices that they were expecting.
Certainly interesting times, however houses are and will be a good long term investment.

"Await end 09 and reassess."

Nar, COUPLE OF MONTHS will be long enough to see whats going on.
The whole market will change in a couple of months.

Pity most first home buyers have been locked out of the oppertunity of a lifetime to purchase a house (affordability) due to high banks deposits, calculated to include massive drops in house prices which are never going to happen.

Here's part of the problem
Qtown money is mine: TV star

""The reason I say that I do not owe any `refund' to Wensleys is because what they paid me is the minimum they represented I would earn," Boulgaris said.

"That representation was backed up by their projections. Those projections were reckless and untrue and designed simply to persuade me to take up employment with them.

"As they represented that I would be earning at least the $535,000 per annum (ie, over my time with them) that is the remuneration to which I am entitled.""

http://www.stuff.co.nz/stuff/southlandtimes/4834145a6011.html

Yes and Harcourts Shanghai branch will be flat out.

Gavin Jones Says: I have a number of friends that work in Real Estate on the North Shore and they are flat out.

Saying they are 'flat out' could litrally mean anything or nothing. It could mean they are flat out trying to sell houses, or get new sellers on their books. It doesn't mean that they are actually selling any, or making any money. I guess these agents now know how hard they actually have to work to make a real buck in this world. Before the bubble burst, they had it easy.

Gavin Jones Says:
"I have a number of friends that work in Real Estate on the North Shore and they are flat out."
That would be right.
I have several friends with small businesss .....they also say they "are flat out"... druming up business to keep the guys in the workshop employed, and at least they are honest about HOW they are flat out.

An addage from my father some 40 yrs ago
"Real estate agents are educated insurance salesmen....insurance salesmen are educated car salesmen...car salesmen do it because they are unskilled and desperate for a job"

I as well have read the article quoted by Janet and also see that Stuff.co.nz have a similar article today (Sunday, 8th Feb). The article in the Press seems a more comprehensive analysis of the Chch market than the figures released by either REINZ or QV which further adds to my suspicion that the latter two organizations are not providing a "true" picture of the state of the market, ie the devil is in the detail. The author, Chris Eves, also looked at repeat sales, ie a property that sold twice during Jan 07 and Nov 08 and found that prices dropped "between 7.8 per cent and 32.1 per cent" . It would be interesting to see a more detailed analysis of this drop, ie did the price drop further, the longer the house was held during this period.

Is there any actual indepentant research or analysis on this site or is it all rehashed NZ herald articles, speculation and conspiricy theories?

Stick to monitioring interest rates as it seems to be the only thing of value on this site.

The guys who run this site must be making a bomb.

Gaz B,
I absolutley agree! The trouble is, that houses/property appear to be the only asset class that , generally,people won't accept a reduction in price!
They will happily (?) accept that shares go up and down in price; that gold goes up and down; and even that second hand cars only go down.... But second hand houses? They should only go up.....
So, yes. I have offered vendors 30% less than even over inflated ratings valuation, and just been told that I am being unrealistic.
Maybe; But I still have the cash in the bank, even at 5% interest, and not a house that would cost me more to own and fund than renting, and the worst that will happens to me is I end up paying more for a house in the future if my view is wrong. Having seen what happened to the UK housing market in the late '80's I can happily live with that.

Edmund Good:
"It also makes the assumption that those in the "know" actually do know what they are talking about (which with most economists these days I personally have to say is NO) "
Or on the other hand, we have to ask questions behind that..
1/ Why we make that assumption?
2/And when the are "talking" who are they employed by?
Which then poses the question, Are they speaking on their behalf, or acting to their legal responsibility and speaking the 'case' to whom they represent...which boils down to the shareholders and/members of that organisation.
In the same manner someone representing an electric company justifying a dam over a rare frogs terrortory......personal spends time as a gardener, and be very sympathetic to the frog huggers.
1/ Why we make that assumption? because we are too stupid to compare who they work for to what they spin....(hey boom time not long ago, their "spin" was quite correct for quite awhile.) and the general independent commentators.
Which is those people who are now stuck with depreciation houses, because they only listen to those who had been right for a couple yrs, and forgot to compare to the independent commentators.

When the Spin just will not make the grade, then they get a hard time.
Old saying "it can be tough at the top but the salary is worth it"

Latest QV data out, sales for January poor, rate of national decline increases to -8.3%

http://www.nbr.co.nz/article/property-mark...n-january-44237

Key points:

The property market dipped in January taking the annual decline in QV Valuation's index to 8.3 percent.

"The signs of a slight recovery in property values we saw at the end of 2008 have not continued into 2009, with the market dipping further," said Blue Hancock of QV Valuations.

The number of properties selling remains at low levels which is also typical of activity around the holiday period.

"Declining interest rates would normally stimulate buyer activity, but concerns over job security, and a more cautious approach to lending by financial institutions seems to be preventing this," said Mr Hancock.

Buyers are also biding their time'".

It seems that informed buyers are taking the stance "why would you buy now when things will be cheaper in a years time". Even the perma bull Bluey Hancock sounds depressed.

Its worth looking at the sequential QV monthly data since May. If anything there seems to be a re-acceleration in decline:

May +2.4%
Jun +0.1%
July -2.2%
Aug -4.5%
Sept -5.8%
Oct -6.8%
Nov -6.8%
Dec -7.4%
Jan -8.3%

Andy,
Having been in the selling, renting and buying markets over the last few months, my read is that the over-borrowed small-time investors are behind this increase of mortgagee sales. Quite possibly those who went to the seminars a couple of years ago and believed and hoped rather than did the numbers and looked at what they were really buying. The quality of a lot of the sale properties are slumlord: bleak boxes witha "sleepout", every corner maximised into a bedroom in a bad (not up-and-coming) area.

Those tenancies seemed to start coming up for review from November and are still flooding in (look at the increase in rental listings anywhere you care to look, even signs outside houses these days). Investor goes to increase rent/ get new tenants (as scheduled by the property manager) and finds themselves with an empty house and a mortgage to pay. Cut and run would look to be a good option for the frightened and cash-strapped.

Competition for tenants is fierce; good potential ones are being wooed in my experience. How about no bond? how do you want to pay and how often? Dog, cat, children? No problem. It's a far cry from 2 years ago. But the Property Investors Assn is this morning in the Press again talking of seeing increasing rents later this year. Eh? With unemployment set to skyrocket; interest rates down; tenants aren't all silly.

We'll see a lot more mortgagee sales soon in this band of the greedy and the gullible. It's mortgagee sales of family homes in the middle class areas that will be the sign of the recession tuning to depression.

I live in the Ponsonby area and prices have indeed slumped and rather badly, probably on average down $125,000 to $150,000 from peak for example:

114 Vermont St sold $820,000 Sept 06 and resold December 2008 for $651,000
LOSS of $169,000

71 Vermont St sold $830,000 Sept 2006 and resold $750,000 May 2008
LOSS of $80,000

22 O'Neill St sold $850,000 April 2007 and resold $715,000 Nov 2008
LOSS of $135,000

64 Summer St sold $681,500 Sept 2007 and resold $640,000 Aug 2008
LOSS of $41,500

So there you go - like for like sales and big price drops - I would ignore asking prices and make a very cheeky offer. Over 30 over priced homes currently available in Ponsonby and some real bargains being purchased at auctions.

Ponsonby values perform well in a hot market but show a dreadful reversal in the slump market as highly geared couples who have used their homes as ATM machines bail out en-masse as the high paid jobs go!

Steptoe; Interesting comment. Have a read of this article. Might explain the motivations.

This is worth a read, if for no other reason than to try and understand by it is in the human condition to have share market bubbles and wobbles....from The Atlantic Monthly (TheAtlantic.com). Remember this when you invest in the next bubble.....
Max

http://www.nzcpr.com/forum/viewtopic.php?f=3&t=13&sid=61e3d7a3b4a37fad78...