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First National warns stalled housing market may force many real estate agents out of industry

Posted in News

Real estate agency group First National has warned the stalled housing market could force agents to exit the industry and offices to close.

Property prices had fallen in July and sales volumes remained very weak, Group General Manager John Stewart said.

“The presently stalled market is affecting many areas of the economy in general terms and is clearly seen in the real estate industry," Stewart said.

“The current hiatus reflects a lack of buyer confidence for a variety of reasons. Buyers remain concerned about the likely cost of money, job security, especially in regional towns and cities, the banks' deposit demands and possible further property value drops," he said, adding many were waiting for the positive effects of tax cuts in October," he said.

"This enduring and steepening downward trend in sales volume and value is now being reflected by business comments, which is a general concern for the future," he said, adding the Reserve Bank should have considered this before its last interest rate hike.

“Such areas as are reliant on discretionary spending, particularly holiday and recreational markets, and many rural service towns have been sorely hit, especially those not involved in the dairy market."

John Stewart“From an industry perspective, I anticipate further losses of staff and closures or amalgamations of real estate offices. This could be quite marked in those markets likely to be slowest to recover, should a leveling or lift occur toward or immediately beyond the end of the year, as one would normally expect."

First National's monthly survey of its 70 offices representing 450 sales people found prices dropped in 80% of its offices in at least one part of the market.

This compares with property price drops in 65% of offices in June this year. In 17% percent of regions prices were the same as July last year.

Here's more detail from the survey below.

Wellington’s northern suburbs continued their golden run from June and were the only places seeing a rise in housing prices across the board for 2, 3, and 4 bedroom homes compared to July 2009.

Volumes: Fifteen percent of offices sold more properties compared to July last year but 55% of offices sold fewer and 30% sold the same number.

Auckland featured strongly in the offices that sold more than last year. Northern Wellington was a bright spot where house sales doubled month on month.

Listings: Listings continuing on a slight downward path overall with 46% of offices reported having fewer listings compared to this time last year.

However, 37% of offices saw in increase of listings and 17% of offices saw no change. Market activity: Visits to the Group’s property website were slightly above same time last year.

General enquiry had increased in Auckland, Whakatane, Johnsonville, Tauranga, Taumaranui and Wellington. Tauranga reported more interest in lifestyle and cheaper properties.

Selection of comment: “Buyers remain reluctant” – Rotorua. “Buyers are offering much lower than the asking price. Market somewhat depressed and nobody is in a hurry to make a deal” – Timaru.

“Less buyer urgency, tightening of mortgage finance” - Nelson city.

“Banks are tightening lending criteria and apart from the deposit are now requiring last 3 months saving records” – Whangarei.

“Buyers have the power, but vendors are reluctant to meet buyers” – Howick, Auckland.

“A lack of confidence, job security, interest rate increases are all adding to speculation of market trends. Purchasers market and cash is talking with an attitude of take it or we move to something else” – Ford Baker, Christchurch.

“Very little economic confidence as recession lingers…” – Mark Stevenson, Blenheim.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.


It is about time the

It is about time the “Selling Property To Each Other Industry” comes to an end. 80% of these guys should work in the real economy - producing. We urgently need reforms to make that happening

WK. What sort of reforms

WK. What sort of reforms would you suggest?

Surely as real-estate agents are 'commission only', the agents will self-regulate. Some of them must be having a hard time at present - talking up a falling resource cannot be easy.

On the other hand if you were an agent and had built a client base over an extended period of time, it wouldn't be easy to leave.

Aaron just read some of my

Aaron just read some of my many comments here I made over a number of  years.

Interesting, some people keep

Interesting, some people keep saying we should invest in  more productive areas, and yet  they spend most of time lamenting about property industry, and never give any answer what would be more productive. 

The property market is

The property market is absolutely stuffed and it will not be fixed for some years yet. Just pay off debt and put money in the bank is being productive. Then we do not borrow so much from overseas and New Zealand businesses will be able to raise money from within NZ and be abe to buy  important assets like farmland and infrastructure. Otherwise companies from countries where they do save will buy these assets from under our noses.

The property industry is

The property industry is productive, once. When the property is built. Land ,undeveloped, in non productive; a house on the secondary market is non productive ~ simply financially productive if sold for a higher price than purchase price. That's fine if it's not financed by non productive debt. At some stage we have to develop income earning industries in New Zealand, either through innovation, or the way that all 'developing' countries do. By cutting the cost of input ie: lower wages. I don't see innovation ( I guess the message in your post, alen) so what is that other alternative coming to a job near us all?

Nicholas, I agree with you to

Nicholas, I agree with you to a certain extent, except that property is productive much more than just once!

There is billions of dollars annually spent on renovations and maintenance and that employs a hell of a lot of people, not just tradespeople but also building supplies (think manufacturers, importers, shops like Bunnings, Resenes etc)...

Even houses that have had no r&m still employ the services of lawyers, accountants, insurance providers, property managers, RE agents etc...

The property industry plays a major part in the economy of any developed country, which is why recessions and property slumps go hand in hand...

isnt that just like the

isnt that just like the sharemarket, buying shares in a company is pretty much only productive once when they need the money for growth.

I dont get it. Bernard's

I dont get it. Bernard's article  is all doom and gloom, while the actual extract is  neutral if not positve with mention of increase in prices, enquiries and sales. The comments in the text are another matter all together.

Utterly useless comments by total unknowns used as "evidence" is the stuff  of propaganda and First National should be hauled over the coals for it . A very corrosive abuse of freedom of speech .

If you have an opinion, you should have the courage of your convictions to indentfy yourself  at the same time, no matter how right or wrong your are.  

Olly: "Property prices had


"Property prices had fallen in July and sales volumes remained very weak, Group General Manager John Stewart said."

Very neutral!

Look into your heart Olly, do you really want to get rich by destroying the dreams of the generations below you by taking away the opportunities that you yourself had? The simple fact is that even by working their arses off most of our young people can no longer afford home ownership, unless they move to Gore of course, or wait, Australia!

Utterly useless comments by

Utterly useless comments by total unknowns used as "evidence" is the stuff  of propaganda and First National should be hauled over the coals for it . A very corrosive abuse of freedom of speech .

Is that coming from the wisdom of Solomon in you?....I find it a very informative article with actually little fault.


Isn't the market always fine

Isn't the market always fine at the right price?  Why should there be fewer sales?  People still buy and sell so they can get on with their life plans. 

This article just reflects

This article just reflects what any agent,valuer,banker,accountant or solicitor will tell you. Over the last two months there has been a huge shift in sentiment all over New Zealand. Where I live in the north island there are empty shops everywhere, houses for sale seem to be increasing in volume by the week and there are for rent signs up all over the city,both residential and commercial. Everyone is talking about reducing existing debt,cutting costs and putting some money aside for emergenies. We have just been told unemployment is rising, mortgage applications are dropping sharply in volume, house sale volumes are reducing sharply, immigration is just about neutral and interest rates and living costs and gst are rising. It all adds up to assets of all types reducing in value over a long period of time until we get a lot of the above negative factors under control. This lack of confidence is going to take years to sort out. I believe we are going to back to house,farm and commercial values that we could not comprehend at present were possible.

"It all adds up to assets of

"It all adds up to assets of all types reducing in value over a long period of time until we get a lot of the above negative factors under control. This lack of confidence is going to take years to sort out. I believe we are going to back to house,farm and commercial values that we could not comprehend at present were possible"

yeah ..whats wrong with that?  the cycle has been rolling over like that for generations.

about every 20 odd yrs a little bigger than the one in between, and about every 3 or 4  20 yr one there is a even bigger one...thats the way it works and u just describe about what stage it is....So long as no one does something real stupid, the next stage will come along when ready, not when we want it to....thats how it all works.

So you dont think it's likely

So you dont think it's likely the sun will come up tomorrow then?

pre 2000 in line with wages

pre 2000 in line with wages and earnings you mean

John Stewart of First

John Stewart of First National - thank you for your perspective.

Hugh Pavletich

On only needs to note the

On only needs to note the reduction in pages in the free local community newspapers of real estate agencies to see the money drying up.

A local First National agency used to ALWAYS have the back page - now they are reduced to a quarter page inside ad for the properties listed. No photo's - no glam.

Another Agency used to have a full page ad, now reduced to a bottom banner strap.

Why would you list with them?

Sad...isn't it...but think

Sad...isn't it...but think about all those 170ooo new jobs that Doubledip promises are on their way to a street near you....or you could undertake some more "Tollycation" and end up gumboot deep in cow there's a job for RE agents unable to find buyers for price bloated property. They will be able to move south from Auckland to the thriving towns in Southland...get to see Tim between fronts of freezing rain.

Please, don’t use bold,

Please, don’t use bold, Iam trying not to read your comments, which is already pretty difficult as you seem to creep out under every stone 

Wally, please restict your

Wally, please restict your comments to what you know ie how to collect the pension which is what you have said you will be needing for retirement.

Wally could write all day on

Wally could write all day on the pension.

Haw Haw

maybe they could write a book

maybe they could write a book pretending to be successful and charge other agents(less successful) to come to seminars all over the country and make millions!!

first national sell crap

first national sell crap cheap houses.  If you look at the stratified REINZ/RBNZ statistics, the bottom decile house volumes are actually lower than they were in 2008.  Whereas if you look at top decile house volumes they are still around 20% more than in 2008.  Anyone exposed to the bottom part of the market is going to hurt, whereas those companies operating in the top parts of the market are doing just fine.

From "the Wizard of

From "the Wizard of Oz"

Dorothy (average real estate investor today): Toto, I've a feeling we're not in Kansas anymore.

Wicked Witch of the West (the evil market of 2010 onwards): "I'll get you my pretty...and your little dog too!"

Click your heels together, with your red ruby shoes

Dorothy: "There's no place like home. There's no place like home."

Dorothy: Oh, but anyway, Toto, we're home. Home! And this is my room, and you're all here. And I'm not gonna leave here ever, ever again, because I love you all, and - oh, Auntie Em - there's no place like home!

There... all you have to do is wear your little red shoes, click your heels together, and say "there's no place like 2007, there's no place like 2007" and all will be well again. 

No .... you are all wrong ,

No .... you are all wrong , its time for agents to start being honest with sellers and tell them their houses are overpriced and they need to face reality. If agents are not going to be honest then they will not sell anything and they are going to go hungry 

u mean time to beat up the

u mean time to beat up the vendor-thats the terminology that they use

gulp gulp gulp...... what's

gulp gulp gulp...... what's that sinking noise around the property market i hear?

we are lucky to have insiders

we are lucky to have insiders to share their expertise,who would have thought that big drops in house sales would mean that some commission based salespeople would leave the industry!helen clarks husband used to get research grants to find out if rich people had better access to health care than poor people.we deal with the swine flu epidemic by telling people to wash their hands more often or producing leaflets.dont eat the brown things floating in the toilet bowl.they are not weetbix!

LOL, bang on

LOL, bang on

Terrible news isn't it....RE

Terrible news isn't it....RE agents forced through lack of sales to find real work. Makes you wonder why so many of them rushed to be agents in the first place! had a lot to do with easy munny...other people's munny!

Bit like the easy money of

Bit like the easy money of the pension eh Wally.

The pension you need to retire on eh Wally.

Haw Haw

wendy can,t quite figure it

wendy can,t quite figure it out.....what,s wrong with everyone ? 

Unfortunately Wendys idea of

Unfortunately Wendys idea of a successful economy is everyone selling houses to each other at ever inflated prices. Manufacturing and exporting whats that?

I cant beleive how narrow and

I cant beleive how narrow and small minded some of the thinking here is. Are Real Estate sales people any different to other salespeople? Like the ones that sell shoes, cars, produce, Insurance etc. Yes you might say in some ways they are as most are prepared to stand on there own abilities. There industry is simply no sales, no pay and I admire people like that.

However if the market ends up being as bad as many predict here then start worrying about your own job as it possibly won't exist.

As in any field of sales 20% of the sales force produce 80% of the sales. Those 80 percenters will certainly be feeling the pinch right now but I know a few of the 20 percenters and they are still doing ok thank you.

The old glass half full or half empty senerio stops so many people getting ahead which is a shame. Personally I havn't met to many people that got rich by putting there money in a bank, but no doubt there are a few. Most successful people have learnt the art of getting money to work for them instead of working all your life for money.

But that of course involves taking calculated risks and so many of you here are obviously very risk adverse. It will show in your net worth in the years to come.

Wise comments Gavin. The

Wise comments Gavin.

The proper use of debt is required to generate wealth sufficient for financial independance.

As you say, no one gets rich putting money in the bank.

Just another property

Just another property investor pissed off as he sees his empire dying slowly and surely by a thousand cuts.

No Anonymous not at all, just

No Anonymous not at all, just wisdom from watching cycles for many years. A number of investors are buying now as they know it is a good time to buy, the ones selling are unfotunatly for them over geared, which always has had a habit of coming back with a big bite, they also possibly purchased at the top of the market and are now taking a double hit. Wisdom is the key thing. Always a sign of insecurity if you cant put a name to your words.

You might just be suprised

You might just be suprised who I am and what I do Gavin. I cannot put a name to my comments as I have a large vested interest in the property and retail markets and I would not want the abuse from the pro property people that my comments would attract. The market is slowly dying and it is going to take a long time for it to get back to values that you and I would not think possible today. Be warned.

It depends on where the glass

It depends on where the glass was to start off, Gavin. It was full of property wealth 2 years ago. Now it''s half empty. The good stuff has been drunk, and there's nothing left to top it up again. It's only drinking what's left in the glass that is going to keep some alive. Look out for a glass quarter empty, soon.

Maybe that shouyld read "

Maybe that shouyld read " quarter full"? Three quarters empty! Cliches....

Yeah it's a pretty good

Yeah it's a pretty good time.

Unless the Chinese property market goes belly up.

Which their RB is preparing them for. Think on the lines of not "if" but "when" and "how bad".

Which would take both the Aussie and the NZ economy down with it. Not to mention the inflow of Chinese capital that would soon become an outflow...


You would have to wonder how

You would have to wonder how Mr Bollard has managed to get it so wrong with the two OCR hikes.

And his Core Funding ratio changes are making money dearer and harder to obtain.


Anonymous: Well if what you

Anonymous: Well if what you say is correct all I can say is we must be moving in totally different circles because that is certainly not what I am observing!

Gavin you just need to talk

Gavin you just need to talk to average people out there.They are struggling and they are frightened. Hence they are trying to save, are not spending unless it is necessary and they are avoiding any form of debt like the plague.

When going outside be sure to

When going outside be sure to wear a crash helmet as dead cats are falling everywhere, and they no longer bounce......