May 2011 - Market Moves into Winter Mode

As we move into the winter months the market supply has as per usual, begun to contract. Typically the cycle will follow a fairly standard pattern of less listings coming on to the market in winter, followed by a spring flush in October/ November and then a sustained period of high stock listings over the summer months, before, once again easing in autumn and winter.

I’ve often thought the best time to sell a property is in winter, as generally speaking, there are the same number of buyers at any one time in the market, but during the winter months, with less stock available, there are often competitive situations on the available stock. Properties that get good winter sun will generally always be in demand, and with the restricted supply side of the equation during these months, the basic economic principles of supply and demand come to the fore.

Market Comment

Both the REINZ and QV figures show a stabilizing property market with pockets of increased activity and demand. According to QV, Residential property values remain relatively stable at a national level. “Nationwide property values have now been relatively stable for several months after falling slightly throughout most of 2010. Values are now 1.9 percent lower than the same time last year, and 5.8 percent below the market peak of late 2007” said QV.co.nz Research Director, Jonno Ingerson.

Main Urban Commentary

A summary of the latest housing market information in New Zealand's main centres.

Across the Ditch

Australian house prices declined more than economists forecast in the three months through March, the second drop in the past three quarters, as higher borrowing costs curbed demand.

BNZ Confidence Survey Results

The BNZ Confidence Survey for May has found an 18 month high in the level of optimism businesses have about where the economy will be a year from now. A net 42% expect improvement from 14% in April and a net 21% expecting a deterioration immediately post-earthquake in March.

Looking Ahead

The lack of new houses being built and construction industry capacity issues as the Christchurch rebuild begins will lead to an inevitable rise in house prices, according to BNZ economist Tony Alexander.

Around the World

The 42-storey Canary Wharf tower that houses the European headquarters of Citigroup is being put up for sale for more than £1 billion ($2 billion), the commercial property agents Jones Lang LaSalle said yesterday.

Housing Consents

Consents for new homes have fallen to the lowest level since records began - 1982.
Statistics New Zealand (SNZ) said the number of new homes authorised, including apartments, has fallen 28% since April to be at its lowest point since 1982.

Of Interest - Average House Size by Age

The average size of a house in New Zealand, based on floor area, is 149 square metres. This has generally increased over time, with houses built recently being over 50% larger than houses built in 1900. Based on the decade built, houses had an average floor area of just under 132 square metres in 1900, while houses built since 2010 are on average 205 square metres.

Wellington Rental Averages

Renters in central Wellington suburbs can expect to pay more than $500 per week on average for a three-bedroom home. In the outer suburbs average rents for a three-bedroom home will cost householders more than $400, while you can expect to pay more than $750 for a spot in fashionable Seatoun or Oriental Bay.