Higher property enquiry raises hopes

Media Release Thursday 3 February, 2011

Higher property enquiry raises hopes

Residential property enquiry has increased significantly over the past two months, and First National reports that indications are that buyers are not far behind.

The First National Group’s internal survey which measures sales volumes, enquiry levels and activity indicators each month, shows enquiry was up in half of the network’s nationwide offices in December and January compared with the same months last year.

First National Group general manager John Stewart said a significant increase in web visits began in mid December.

“That was quite a surprise. Then the first week of the New Year started with around 98,000 web visits and was 120,000 at the end of January, 10,000 above the same time last year.”

Open home attendance was also notably up.

“We had predicted more NZers would holiday at home or for shorter periods this year. Coupled with wet weather, it seems prospective buyers were spending more time on their computers and visiting open homes,” Stewart added.

“Stable interest rates and the likelihood they will continue well through the year will certainly encourage buyers. The lack of new home construction adds demand pressure to the existing real estate stock and this will likely be the case for the next couple of years.”

While enquiry was up on the same time last year, Stewart noted overall sales were similar to last year’s totals.

“The difference this year is that enquiry is without doubt more committed, better researched and it seems, more serious about real estate change. Perhaps three years pent up but suppressed desire is starting to be fueled by less restrictive lending criteria at the banks and a more settled economic outlook.”

House selling prices around the country dropped month on month in 64% of offices, with 36% reported prices remaining the same.

Auckland was notably strong and almost 80% of offices there reported property prices were similar to those in the same period 12 months prior.

Agents commented that many buyers in Auckland were still waiting for price drops but demand would probably not see that eventuate and such people were increasingly missing out on preferred properties as active buyers beat them to the desirable ones.

However, in many other areas, prices were gradually trending down as new vendors, particularly, adjusted to the “new normal”, Stewart said. “Much old stock remains above buyer aspirations still” he added

Investors were still scarce and building projects were reportedly confined mainly to the design/build companies. In some areas, people were finally starting to build on sections they had purchased several years ago.

“In general, it would appear to us that the market is more settled and certainly more positive than a year ago when activity plummeted in January and stayed low for most of the year,” Stewart concluded.

Regional points below: Northland: More enquiry for beach property and bare land with no covenants on. Sales numbers were higher than the same period 12 months ago.

Auckland: Buyers uncommitted, waiting for prices to drop but unlikely to happen due to demand. Sales numbers were the same as 12 months ago.

Central North Island: The only region where agents reported prices were trending up. Sales volumes here were also up on the same time last year. Yields of up to 10% were attracting investors.

Bay of Plenty: Enquiry centering at the lower end of the market. Sales volumes were the same as last year but prices were lower.

Western North Island: Buyers making quicker decisions and more multi- offer situations than of late. Increased number of first home buyers.

Lower North Island: Slight improvement in market but mostly just lookers.

Upper South Island: Fewer sales volumes than the same period last year. December the quietest on record in Motueka. More design/builds reported.

Canterbury: Slightly more confidence but few decisions due to earthquake recovery. Sales volumes unsurprisingly lower than the same period a year before.

Lower South Island: Increased enquiry but buyers procrastinating. More building activity on sections sold several years ago.

ENDS

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