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Real estate agents report stronger buyer activity and rising price pressures in BNZ-REINZ survey for July. Your experience?

Property
Real estate agents report stronger buyer activity and rising price pressures in BNZ-REINZ survey for July. Your experience?

Real estate agents report seeing more buyer interest in open homes, more buyers following through on sales, more auction activity and more first home buyers in the BNZ-REINZ survey for July.

A net 14% of agents surveyed at the beginning of this week viewed prices as rising, up from a net 5% in early June who saw prices as falling.

The survey found agents believed the market was balanced for the first time since the survey began in April, meaning agents believed buyers were just as motivated as sellers. The previous three surveys found buyers were less motivated than sellers, suggesting the market was in favour of the buyers.

"The increased interest appears to be coming largely from first home buyers with a net 30% of agents reporting increased interest from new home seekers, but a net 1% reporting a decrease in interest from investors," BNZ economist Tony Alexander said in releasing the survey of responses from 742 agents in the REINZ.

See the full survey results here.

The opt-in email survey sent to more than 10,000 agents in the REINZ has been running since April.

Alexander said it was too early to assess the seasonality inherent in the survey results, but the relatively strong figures shown in earlier this week despite bad weather suggested the results were not seasonal.

He said the survey showed quite a sharp turnaround in sentiment in the last four weeks.

"At a local level perceptions of prices rising are very strong in most parts of Auckland and Christchurch, but there are also strong perceptions of prices falling still in the likes of Tauranga, New Plymouth and Invercargill," Alexander said.

A net 23% of agents reported more people going through open homes, up from 10% in June.

"Not only are more people appearing to show interest in buying a property but June was a month when a lot of extra people came out of the woodwork compared with May’s increase," Alexander said.

He cited perceptions about a lack of new housing supply as a factor in the strength.

(Updated with chart, link to attached full report and more comments)

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47 Comments

sk, you obviously don't get out much.  If you did, you would know that 'gay' has a contemporary meaning, unrelated to sexuality. But, since you are an innocent, it means boring, uncool, lame etc

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haha - What a maori comment.

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#fail

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So these results are based on a survey of R.E.Agents.  What's that worth?

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Lol first home buyers who want to get loaded up with debt, GO HARD. Lets see whos a bankrupt in 5 years time, you or me.

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Always good to see such intelligent commentary on this website...

Now if you pillocks would mind standing aside for a moment there are some things to consider:

1.  If you want to find out what buyers and sellers of property are thinking then probably the best source is gathering information from those who deal most with buyers and sellers - real estate agents.

2.  The sample size of 742 respondents is large enough to give you a statistically robust measure of this market with a margin of error of +/- 3.5%...  

3.  With only four months of results it is hard to statistically remove bias that may come through from agents always being too bullish, but over time it is possible to correct for this factor.  Also it is too soon to be looking for seasonal patterns or any time lags between intent and deals closing.

4.  It is a stated fact that there is a shortage of housing, particularly in Auckland.  Tony Alexander says that NZ needs 25,000 new houses each year, but there are only 14,000 building consents going through each year at the moment.  A shortage of supply in any product market generally means that prices will rise... one of the economic laws of gravity.

Some considered commentary on what is happening in the economy would be quite useful rather than this reptilian drive drivel displayed all over this website.

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Why you mention TA and what he said? I have BH, Wolly, NA said lots of thing here for a long term house price devaluation, why you don't mention them? Their sayings may more useful then a economics.

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You having a laugh?

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"“The business of the United States used to be business. But somehow ....we turned the business of America into housing”…" Same applies to New Zealand.

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HtG - Which RE Agency do you work for?

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Mr Rodgers, he is surely pulling our leg? Surely?

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Rodney Dickens has written great things on why such surveys are usually a waste of time.

Factor in that its an RE agent survey conducted by the biggest RE spruiking bank economists in the business and its.......INSERT OWN WORDS HERE 

anyway I digress. If a lot more first home buyers enter the market, and make up a significantly bigger proportion of buyers then isn't that likely to lower the median sales price, all things being equal????? 

"It is a stated fact that there is a shortage of housing, particularly in Auckland.  Tony Alexander says that NZ needs 25,000 new houses each year, but there are only 14,000 building consents going through each year at the moment.  A shortage of supply in any product market generally means that prices will rise... one of the economic laws of gravity. "

There has been a "shortage" for the past 3-4 years ago, yet prices are no higher than they were 4 years ago - so that dispels your statement. The fact is the "shortage" is nowhere near as significant as Alexander states, because he only looks at crude data rather than looking at some of the social factors. More people are sharing homes. More people in their 20s are living with their parents. Much of the biggest population growth occurs amongst families living in state housing who overcrowd, or "disperse" across several households -  this places limited pressure on the private market.

not only is the shortage not as bad as stated, "realisable demand" is sickly because prices are still too high and the economy is crap. So even if there is a shortage ie. lack of supply - that will only be problematic if demand is robust - and its not.

 And any one with half a brain will realise that interest rates are likely to be above 7.5% in a year or so - so what may seem "Do-able" right now in terms of servicing a mortage could become a lot harder in a year or two. Of course some will not think like this and be conned into the banks' "hot deals"

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There are a lot more first home buyers in the affordable areas at the moment.

An example of this is Upper Hutt, Wellington. The average sale price is between $315-350k and in Upper Hutt, you can get a really nice home in a good location for that price; 3-4 bedrooms, modern kitchens and bathrooms, polished floors and/or new carpet, new paint, wiring etc, a large double garage, and it's sitting on an 800m2 fully fenced free-hold section in a quiet, friendly neighbourhood surrounded by other owner-occupied homes with house-proud owners living in them. 5 minute walk to the train station or 3 minute drive and you're on the motorway, really well-known and high decile schools close by. If you're a young couple working in Wellington City and looking to buy a home, start a family etc, both in solid jobs earning say $100k between you, why wouldn't ya?

The two alternatives to this are:

Buy  a shitty one bedroom flat in Wellington city on a cross-lease section hardly bigger than the house itself.

or

Pay just as much as you would in mortgage on renting a house (still have to be in the suburbs somewhere for that price) and have no sense of ownership, no motivation to keep the place in really nice condition, and no knowing when the owner is going to kick you out to sell the place or increase the rent.

Stop bashing the people who are just trying to start out in life. I don't agree with people buying on really low deposits etc, but if they've been working hard for the past 3-5 years, saved $40-50k not just blown it on all getting pissed or putting countless engines into the same car, then they should go for it.

Sincerely,

Cameron Macneil

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Just think how much better off they will be, when they delay paying their $50k away now to secure their starter for $350k, and it drops, even just less than 6%, to $330k. Or that same $50k would then buy todays $375k property that falls. Time is their friend.

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If they want to buy in auckland they may as well bite the bullet and do it now - dont you think - oh wise sage NA? 

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Why? We both know prices in Auckland are going to fall  :). You buy any asset, when the cost of ownership is less than the cost of using ( renting) it, and substatially so. There are, as you know, many costs hidden in home ownership; from 'is it leaky' to, what will my insurance be next time. And until that equation changes, price must fall. Any homebuyer, especially a first timer, should be staying away from what is an historically overvalued market and be patient...

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I pay the same money in rent for a nice 3 bedroom villa in Remuera - great education for the kids, very safe, good people, minimal commute - as I would on a mortage for a shitheap in an outer suburb lacking in those attributes

I'm quite content with my choice

Others would rather buy the shitheap out west

And good luck to them

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And this is the problem with most FHB these days. They want the "Grammar zone" house in "Remmer's" rather than living in a "shitheap" outer suburb.

Ever heard of a property ladder and starting at the bottom and up grading along the way?Why do you need everything right now this very moment??

MIA, you need to get out more. Auckland is a great place to live and it has awesome people,great schools, clubs and communities outside of the Grammer zone. You decide to pay a premium for the perceived privelege to live in that area. Your choice. But to me you don't sound content as you have said numerously you would like to be able to afford a house in that area.

PS. nothing wrong with west!!How many surf beaches in central Auckland?I heard St Heliers goes off and gets to 1/2 foot in a cyclone

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28 - that's my choice isn't it? And I'm happy with it.

I do have standards:)

My son is absolutely excelling at Grammar - his future comes first.

I have friends owning in cheaper locations like Glen Innes and West Auckland - many of them have had repeated problems with break ins, troublesome neighbours, poor schooling etc.

As I say each to their own - I'm happy with my lot.

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People who can't afford Grammar Zone and Remmers are insecured and need to "get out" to the Grammar Zone to have a look at the differences!!  Sea views, mature trees, wide streets, generous sections, nice clean presentable houses with manicured gardens are all examples of quality Remuera living...not to mention the history and association with a large number of well-known schools.  Look, people actually look after their houses here and proud of it!!!  You go to Henderson, Glendene, Massey and Te Atatu and tell me you can't spot the difference~

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Of course there is a difference just like your BMW and my trusty Toyota

Some people just need Grammar zone to be happy, I don't and I save a heap of money, stress and wasted time at open homes.

Each to their own

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I don't need Grammar zone just to be "happy", i need it to give my son the best future possible 

I could happily live in a place like Ellerslie, Pakuranga etc - but my lad would be unlikely to excel to his full potential  

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It's my own choice to live in GZ so that my kids can attend EGGS and ABGS.  I am very luicky to own my own home in Dell Ave with a small mortgage (< 100k) and we are happy with the quality of life here, so no stress...

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Time is their friend - the thing is - there is always some reason to wait - bird flu, Y2K, a war somewhere, Italian bank debt contagion, all blacks losing world cup, depreciation change, possible CGT....................

There comes a time when it just makes sense to stop fretting and do whatever it is that you want to do - if its buy a house - then find one, sign the papers, move on to more important things.

There are many more important things. 

Come on - lets try and agree on something - just for kicks.

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What can be more individually important than making a financial committment; possibly the most expensive that most people will make in their lifetime, that could take 25 to 30 years to pay off and that could have life altering consquences if they misprice it? Any descission that potentially affects the rest of your, and your families, life is of primary importance, I'd suggest? And FHBers are the 'cannon fodder' of the property pyramid. Now is not the time to be entering at that bottom. 

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Well my 'neighbour' was a FHB a long time ago - and now he is more concerned with his trip to Brazil next month.

But anyway - the Not Applicable pied piper of FHBers has spoken.

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I too, was a FHB once upon a time. But it made sense then! I ( and everyone else) had to have 30% deposit and could have a mortage that was payable at no more than 33% of my gross wage. That meant that I was able to pay off my first home in 4 years ( the wife's wages didn't count in the mortgage in those days, so time was indeed my friend). Sure, time have changed. But for the better? Wouldn't todays FHB be better of with my situation, than what they face today? They need BOTH incomes to even get in the door of their first home. And then, what quality of life do they have, let alone 'how can we afford a family'. Rent, FHBers...and wait. Things can hardly get worse for you.

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Easy to buy hard to sell and if ya cant afford it don't buy it.

As long as one does not fall in this category then they'll be safe from a financial crash, like in Portugal and Spain.

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Let's get a track record on this survey and see.

Something is going on in Auckland in particular.

There's a shortage of supply after three years of few new houses being built, the March 19 rate cut and some internal and external migration are helping. 

Whether it spreads to the rest of NZ (and outer Auckland) is another thing.

cheers

Bernard

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Yes Bernard it's the spreading that matters...what spreading! We shall soon see university degrees in market spin and bullshit as being worthwhile career courses for Kiwi....note the Mayor of wgtn and mates going on a media study course! on the ratepayers. The common garden variety will be the BBS and the BSp.....but for a few determined to journey up their own rear ends, there will be Doctorates to be had.

There will be NO rebound in the residential building sector until the market sees real reductions in labour charges and in the prices of the material needed...cement, steel. lumber, joinery, council theft and all the other stuff.

Funny as it seems, we have a "more from less" situation in play. Demand falls so prices rise to return the same revenue and profit/income for the players. Name one regional council that has lowered consent costs on building...just one!  Find and show where materials costs have fallen....identify a decline in labour charge out rates....????....Even bloody power costs have shot higher!

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Get with it Wolly, this crap has been offered for at least a decade....

"...what spreading! We shall soon see university degrees in market spin and bullshit as being worthwhile career courses for Kiwi"

regards

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I know a few families that are renting their $500k home but have moved to Auckland (or OZ) because selling would be at a loss and cost them money...so they rent it out...

regards

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One of the FHB's tried at 12 auctions to buy - Chinese investors bought 11/12- a baby-boomer got the remaining one as a rental.

I don't blame the foreign investor - Their Governments righly protected them against this situation and they think we are fools for not protecting ourselves.
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You nailed Willy F F ... but alas the argument some how always returns to "the markets going to crash cos first home buyer can't afford them..." The reality is we are selling NZ to foreign investors and think it's for the good of the country!

House prices, particularly in Auckland will continue to tick upwards... and there will probably never be that BIG crash that has for so long been predicted here!

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So: You don't mind selling New Zealand off, as long as it helps property? You don't mind young kiwi FHB'ers being gazumped by non-residents, as long as it doesn't hurt property prices? If you want to keep New Zealand, kiwi and our young here, working to advance our nation, you need to re-examine that lack of concern. Because once 'we' have sold something; it's gone...until such time as we can buy it back, ourselves. And how is that possible if we've sold off the homes and the businesses we need to earn that repurchase money?

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Angry man... and probably entitled to be... but don't shoot the messenger...

My point wasn't that I support the selling of New Zealand to overseas investors. Quite the contrary, I was only drawing attention to the reality of who is buying up Godzown and who is selling it...

Your tirading about the inevitable economic collapse and how it's going to crash the property market is at best wishful thinking. Aside from your seeming desire to see the hearts of many good solid Kiwis shattered by losing their hard earned homes, like so many poor Americans, you fail to see that it is highly unlikely, because other Kiwis are blithely selling their birthright to overseas investors. A practice I see as despicable, but never-the-less a fact.

Even your great leader Smile-and-Wave-Boys and his gang of robbers are doing it so they can balance the government books in the short term and who knows what government will, pretty soon, hold virtual controlling shares of our so called state owned assets and ultimately control of NZ...

There is nothing more I'd like to see than Kiwis keeping things Kiwi, like the Chinese keeping things Chinese, but it aint going to happen and pretty soon we'll belong to some-one else entirely. Sold out completely for a few old muskets, some beads and a dirty old blanket... and maybe, some would argue, an enevitable result of absolute greed!

hmmm that's happened to Aotearoa before me thinks...

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Bernard

I'm not convinced about the "upswing" - at least not a sustained upswing (I acknowledge there could be temporary upswing at present)

Where is the strength in the Auckland economcy to support higher prices - you tell me.

when the ChCh rebuild swings into action in earnest there will be plenty of Aucklanders (and possibly immigrants) moving to Chch. This will take pressure off demand

Interest rates are likely to move up significantly next year - unless the economy remains really sick, in which case a lid on demand will be imposed anyway  

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BH. You can seek anecdotal evidence till the cows come home. Or, you can pick up the phone and ring "the man" at Barfoot & Thompson and ask the question "who is buying" Is it predominantly  locals? is it migrants, is it first ime buyers, is it trading up?  or, is it a simple cross-section mixture of all of them.

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I think you know the answer... but we'll still spend hours and hours debating the 'recovery' or 'collapse' and first time kiwi buyers...  a group of people who are as becoming as rare as the little bird whose name they share...

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No wonder, why Auckland

 Considering the situation in our economy the government is certainly more relaxed about rather wealthy immigrants, who in general contribute.

Unfortunately I couldn’t find official  immigration figures for the last three month, but I think a stream of rather wealthy people from troubled countries/ continents are applying for immigration. Kiwis from these countries/ continents are increasingly coming back too and support the demand for properties, especially around Auckland. Now in difficult times people choose bigger cities, because, they think job offers and business opportunities are greater.

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I live in a small rural town within commuting distance to Hamilton. Population around 8,000. I live in what is regarded as a good part of town and in the last 3 weeks have seen 4 houses sell close by. Two would have been within a lemon throw and the other 2 a golf drive from my place. Some of them had been on the market for a number of months.... it is like all of a sudden bang they have sold.

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Talking to a painter the other day. Whats your charge out rates these days? $37 for cash jobs and $45 for through the books. Do lots of cash jobs. $1 a Km travelling charge. Moaning that work is hard to come by! I think him and his mates need to have a reality check along with Councils and building suppliers. Times have changed.

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The REINZ have very little credibility.  They're always picking an improvement in the market, occassionally they're right because a stopped clock sometimes is right.  Let's stop pretending they have anything interesting to say.

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Perhaps there are more first home buyers looking, but this will only bring down the median price as their purchasing power is limited.

Renting will always be cheaper than buying, as there is an emotional premium to home ownership. Also - while your rent will track inflation over time, your mortgage stays fixed, so in the long run (like over 10-20 years or more) you will end up paying less in interest payments than rent, plus you get the benefit of any capital gains if and when they do happen. So in the long run property pays off - that is why it is supposed to be a long term investment not a quick way to wealth as it has been viewed during the bubble days of 2000-2007.

So main question for first home buyers should be - can I afford it and is it the right thing to do considering my current life situation?

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That is what the wife and I talked about for 2 years before we bought. I was saying that we saved our 80K deposit in 3 years, another 9 years like that and we could buy outright.

Another 9 years......... well we ended up buying just before Xmas and we are loving it. Spending more time in (a bit of sanding & painting here and there) Paying off as much as we can now before rates rise too much. Summing up we're glad we put the money we saved towards something for our future. Everyone we have spoken too directly says we got a great deal. (we had been looking for 3 years) It seems only folks on this blog who haven't seen the house or know anything about us who have been shooting us down.

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Here you go everyone.  Top property man will answer all your questions.

 http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10738412

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FYI have updated with my double shot video interview with Tony Alexander

cheers

Bernard

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