Trade Me Property assumes the mantle of data insight leadership

by Alistair Helm in ,


Trade Me Property today released a new competitive attack on its rival Realestate.co.nz with its inaugural Property Price Index. This report provides insight into the trends in asking price by region and also by property type. In my view vital information from a credible source that will be greatly appreciated by the real estate and financial community.

In launching this new report Trade Me Property has literally picked up the baton from Realestate.co.nz - a baton it seems Realestate.co.nz was only too happy to relinquish, but this may turn out to be a decision it comes to regret in time.

The NZ Property Report from Realestate.co.nz was conceived of over 5 years ago and has become a vital insight into the supply side of the property market, data that was quoted and reviewed by financial institutions and real estate industry as well as the media. Sadly the last 12 months and especially the last 6 months has seen less and less effort focused on the report by the management of Realestate.co.nz. The lack of focus started with the timeliness. When it first came out and for the first 3 years it was published on the 1st day of each month and the media become accustomed to this information which built brand profile and credibility. Latterly however it often took until the 15th of the month before being published. Added to tardiness was incompleteness and lack of openness. The release of the monthly information ceased to be a complete report and became simply a press release and just last month the data was not even published online and no access to the raw data has been made available. At this time the online source still only shows the July report. Clearly Realestate.co.nz attach little importance to being judged and viewed as a respected knowledge base and thought leader - that is the baton that Trade Me Property is grasping.

So what is there to like about this new report from Trade Me Property?

As with all things from Trade Me there is a simplicity and clarity of communication I admire, clean graphics aid comprehension.

However the real value is in the detail. They are the first source to have segmented any property information by property type. To describe NZ property sales price by one number when that number is made up of such a variety of differing house sizes and types from apartments to townhouses and units is too simplistic but that is what all the other source do - be it REINZ or QV.

Trade Me Property Price Index details the typical listing price for 1 & 2 bedroom houses as compared to 3 & 4 bedroom houses and the trend over the past year. Who would have thought that within the headline price of property in Wellington rising at an annual rate of 6.8% that large 5+ bedroom homes are down 5.2% over the past year.

 

The overriding benefit of this report is timeliness, being produced on the 2nd day of the month - ahead of all other property reports on the September data. This is how it should be as a property portal has the data at its finger tips to compute and present in minutes.

As to future wishes. I hope the raw data will be published so those organisations who have found the Realestate.co.nz so valuable will have access to this alternative data which is potentially more comprehensive as it features private listings as well as licensed agents (of course the boycott of Trade Me Property by some agencies may still limit their ability to represent the whole market but statistically this data should be representative). It will also be great to get more granular data so people can see the trend in listing price for a suburb and for 1 & 2 bedroom houses in a particular suburb over time - now that would be great.

In my view Trade Me Property has made a smart move and Realestate.co.nz have dropped the ball - let's see if there is a reaction and Realestate.co.nz realise how important this move has been.


Auckland property prices - so much data!

by Alistair Helm in


There are now 6 separate sets of property price measures for the Auckland market. All of which are seeking to provide an insight into the trend of price across our largest city. This barrage of statistics published in our daily newspaper is enough to confuse at best, and paralyse at worst, the most ardent of property buyer / seller / investor and even agents!

Here was how the first 2 weeks of July appeared in the Herald:

2 July: Barfoot & Thompson - Auckland's biggest real estate agency has this morning released sales data for June, showing a slight decline in sales volumes but average sale prices up $11,088 in the 30 days - which equates to a daily price rise of $369.60.

7 July: QVQV said the Auckland region as a whole had increased 2.7 per cent over the past three months and 12.3 per cent year on year

14 July: Realestate.co.nzThe country's largest house sales website showed Auckland's asking price hit a new all-time record of $732,240 last month.

14 July: REINZ - The stratified median housing price index showed that in Auckland, prices rose 1.6 per cent in the month

Fair to say that an average person could walk away from reading these reports from the first 2 weeks of the month with a sense of confusion as to which set of data to trust and belief. Sure they all point to rising prices and some speak to hitting a peak, but the margin of increase varies considerably as does the indication of a trend.

Charting these separate measures produces a chart that is worthy of some analysis and commentary.

First let me explain the format of the chart. All of the price data has been indexed to a base of January 2008 = 100 and all monthly data has been computed on a 12 month moving average which makes it easier to view in terms of trends and also excludes the seasonality that impacts all property stats.

As you can see there is a fairly significant disparity between the highest index in June (REINZ median price at 136 as against the lowest being the Realestate.co.nz Asking price at 126. Equally as you will see the path of the index through the property crash in 2008/9 saw some of the measures drop by 10% (QV) whilst others barely dipped into negative (REINZ median price).

Examining each of these as to their composition provides a method of evaluating the value and relevancy of each.

1. Realestate.co.nz Asking Price

This measure is actually the odd-one-out within this group as it measures the advertised price or advertised search price of property coming onto the market, whereas the other sets of data analyse the outcome of sales. A noticeable aspect of this measure is 'consumer sentiment' which tends to result in over estimated values in down-turns and under estimated values in up-turns.

This may seem counter-intuitive as you would expect to see over estimation of value - the 'over-inflated expectation of sellers' in bubbly markets as we have been in in Auckland. The reality though is that whilst the vendors may genuinely have inflated expectation, their agents tend to price for search online at more conservative levels as we have seen recently.

So tracking the path of the index of Realestate.co.nz Asking Price shows it currently tracking at the lowest of the 6 indexes over the past 6 years.

 

2. Barfoot & Thompson Average Sales Price / Median Sales Price

The data from Barfoot & Thompson whilst not reflective of the whole of Auckland is more timely than the others and with close to 40% share of the Auckland market and representation in all suburbs, does afford it credibility.

The average sale price though is an imperfect measure of property prices as it is open to skew if the composition of sales in a month changes significantly. For this reason Barfoot & Thompson has started publishing a median price which is a more statistically valid measure of property prices. It is though interesting to see that the median price has crept ahead of the average price over the past 2 years. This situation would tend to occur when sales volumes of extreme high value properties slows in proportion  to other segments of the market. This though would seem to be contrary to the data which shows $2m+ properties have doubled in each of the past 2 years, whilst sales of sub$400k priced properties have fallen off. More likely is a situation where the majority of sales in the $500,000 to $1,000,000 bracket have edged up significantly driving that median from $450,000 to $625,000 in the space of just over 3 years.

 

3. REINZ Median Sales Price / Stratified Median Sales Price

The data collated by the Real Estate Institute is the most comprehensive and timely data in that it aggregates sales records from its members as licensed real estate agents who account for around 90% of all transactions each year. The data is of unconditional contracts and thereby is recorded closer to the date of transaction than settlements registered at LINZ and utilised by QV for their data. 

The REINZ median sales price has been reported monthly since 1992 and is one of the most complete data sets for the whole country. However as presented in this chart, the index is the highest of all the data sets presenting what from outside would seem to be an optimistic view of property prices as it hardly reported a dip in sales price in 2008/9. 

The reason that the median price in Auckland as reported by REINZ is so out of kilter from the other metrics is exactly the reason why REINZ implemented the Stratified Median Sales Price in 2010. The Stratified price index makes adjustments within the market to ensure the composition of suburb sales is representative when the market tends to skew towards certain suburbs as has been the case in Auckland over this 7 year period. For this reason the Stratified price index provides a much more accurate representation of true price movements and the trend on the chart certainly bears this out.

 

4. QV

The data from QV is in many ways the most accurate, yet it does suffer somewhat from lagging the other data sets, requiring as it does the data from property settlements and title changes to be registered at LINZ. Something that largely happens online nowadays and thereby removes some process time delays.

The data is not reported as a median or stratified median but is analysed to assess the actual sales price of each property sold against the estimated property valuation that QV has on record for every property in NZ. So their system and the resulting valuation index is a closer evaluation of the trend in core property values and takes into account the improvements and developments that are undertaken on properties that do materially effect the value of a property which are not accounted for in any of the other data sets and can cause skewing of data. This factor has been a driving component of the Auckland property market for many years as the pace of gentrification of the inner suburbs has seen extensive renovations drive enormous price movements


One of the benefits though of these numerous data sets of property prices in Auckland is the ability to see the variance between these data sets on the chart and also to provide the ability to visually see the the set or sets of data that are in someways the midpoint and therefore the most likely to be the most accurate. From my reading of the data this would be the QV valuation data and the REINZ Stratified median price. Both of these data sets benefits from computational analysis by qualified and trusted professionals. In the case of the REINZ Stratified price with the assistance and guidance of the Reserve Bank and in the case of QV the professional teams of valuers and the resources and skills of Core Logic.

What I find very interesting is that it would appear that the Barfoot & Thompson median price data tracks very accurately to the trend of these other two. It may still be a bit too early to tell for sure, but the indication is clear. This could well be the result that Barfoot & Thompson sales are a true representative sample of Auckland property without extreme outliers.




Trade Me Property continues to struggle

by Alistair Helm in ,


Another month has passed and the continued impasse within the real estate industry as individual companies decide as to their commitment to Trade Me Property continues. This all began late last year and with each passing month I have the sense that the struggle for Trade Me Property grows. They still attract an enormous audience relative to Realestate.co.nz but losing support and loyalty of their customers - the real estate salespeople and business owners must be hurting.

A month ago I reported on the latest analysis of the differential in listing stock between Trade Me Property and Realestate.co.nz. At the time the total inventory advantage fell to Realestate.co.nz with Trade Me having just 92% of the listings.

A month later and the relative advantage has moved further towards Realestate.co.nz. For the data presented below I have made an adjustment for the component of 'private sale' listings on Trade Me Property to thereby provide a more accurate reflection of the differential for licensed real estate agent listings. This adjustment revised the 92% figure to 83% of all licensed agent listings on Trade Me Property at the end of April.

The passage of the month of May has resulted in a weaker relative position for Trade Me Property now with just 76% of the listings stock of licensed agents as compared to Realestate.co.nz - close to 1 in 4 of every agents listings is now not being displayed on Trade Me Property.

A significant drop has been seen over the past month in the inventory of Barfoot & Thompson on Trade Me down from 95% to 78% whilst Ray White continue to shows the strongest support slipping just 3 percentage points from 97% to 94%. By contrast Harcourts, the largest NZ real estate company now has less than 2 of every 3 of their listings on Trade Me Property.

With the passage of time so the transition of real estate companies to the new subscription regime has progressed, my latest insight is telling me that almost all of the major real estate companies are now onto the new subscription plan of a payment of a single fee for every listing (rate card $159 + GST). However unlike the prior monthly subscription fee of an "all you can eat" model just because a real estate company is on the subscription plan does not mean all of the listings of that company are displayed on Trade Me Property.

New listings are a more accurate indicator of the level of support for the new pricing model and the data of listing numbers taken from the respective websites shows how the industry is acting in voting with its marketing dollars on behalf of its clients.

In the month of May Trade Me Property only displayed 3 out of every 4 of the new properties listed in the month on Realestate.co.nz. That disadvantage was even more significant when you look at the new listings in May from the largest real estate company Harcourts which displayed less than 6 out of 10 of it's new listings on Trade Me Property; for LJ Hooker it was only half of all new listings. Ray White continues to show what looks to be staunch support with 95% of all new listings in the month featured on Trade Me Property.

New listings are the life-blood of the industry and these figures certainly show that this impasse over listing fees may well have started out as a regional boycott with the mass-removal of all listings, but has now turned into a more damaging and potentially insidious erosion of new listings one-by-one, day-by-day, agent-by-agent.

 


"Where is my property?" - Lost in Canada

by Alistair Helm in


We all know, or I would hope we all know that digital marketing is the primary focus for real estate; more people, spend more and more time online on mobile apps and websites searching for property to buy or rent. This is the mantra that I was extolling to the real estate industry back in 2006 and yet I still sense that the message has not got through to all of the community.

I am a fan of technology and love to explore new apps and gadgets but still rely on the ones that do the job and do it simply. The Realestate.co.nz app is a great example - it delivers a simple solution defined as "discovering property around me". I fire up the app and it shows me all the properties that are for sale or rent within a kilometre or so of where I am standing. Perfect for buyers, perfect for agents and their clients as it showcases the current properties on the market, especially good as it highlights open homes.

Or so you would think, until you discover that unless you were standing on the corner of Lloyd Avenue and Braidwood Avenue in Peterborough, Ontario in Canada.  If you were not at that exact point you would have no idea that the house being marketed at 1 Lloyds Close in Rolleston in Canterbury was actually open for viewing this weekend.

Confused? - well the issue is that the property listing in question, a nice single level 4 bedroom brick house has an address of 1 Lloyds Close, Rolleston, Selwyn, Canterbury has, through the computational programme at Realestate.co.nz placed the property listing on the world map in Canada not in Canterbury. The Realestate.co.nz system uses Google maps to locate this address with a pin on the Google maps on the website and on the mobile app. However as we all know technology can perform strange acts at times and in this case the Google maps programme decided that 1 Lloyds Close, Rolleston, Selwyn, Canterbury was actually 1 Llloyd Ave, Peterborough in the state of Ontario, Canada!

 

This is somewhat amusing, but actually there is a serious issue here as the agent in their role of providing services to the client is potentially failing that client as the property they are marketing is invisible to anyone standing in Rolleston using the app or in fact a person anywhere using the mapping function of the app - especially when you consider the app has been downloaded over 200,000 times and is being used actively everyday by buyers.

There is a very simple solution to this problem and that is provided by Realestate.co.nz who can go into the their database and overwrite the geo-locational address to place the location pin in the right place and hopefully for the benefit of the owner of this property it will be completed within minutes of reading this article. However the fundamental issue is one of agents 'owing' the online marketing and checking that all of their clients listing's content is accurate online - a very important process often overlooked.

In case you were wondering I found a total of 24 NZ properties on the app today that are in other countries - 1 in Tasmania, 1 in Illinois, 2 in Kentucky, 2 in New York, 3 in Ohio another one in Canada and 13 in the UK!

As a note the Google map on the Ray White website of the property is correct and places the property in Rolleston, but it further reinforces the need for agents to check content on all medium - mobile and web.


Choosing the right Property app for the iPad - a review of the NZ options

by Alistair Helm in , ,


Digital background iPad shutterstock_174836606.jpg

It’s just 4 years since the iPad first entered our lives and despite the view of some commentators, that sales might only top a couple of million, the product has become a legend and total sales to date far exceed 100 million and are likely to continue to accelerate in the coming years.

The device fulfils a role that is far removed from the functionality of the smartphone device or the classic desk-bound computing device. The device is tactile and is as likely to be found on the couch or kitchen bench, as on an office desk. For this reason, the iPad (and the other Android based tablet devices) is in many ways the battle ground for property apps, as property searching is largely a ‘lean-back’ experience undertaken in times of rest when you want to immerse yourself into a world of escapism with dreams of a new home.

For these reasons I would contend that the best property iPad app almost bears no relation to the iPhone or smartphone app. They provide platforms for very different use cases. The smartphone is all about proximity based discovery and routing to viewings as well as alerts to new listing - functional activities requiring key information, easily and quickly accessible. The iPad is all about browsing in a mode that the traditional laptop or desktop could never deliver to the needs of the buyer or renter. The experience needs to be more of a magazine experience - rich in imagery and immersive in context. The iPad is an intimate device that is held close and in effect caressed and so the experience of an app needs to bear that in mind.

For New Zealanders however I have to sound a note of cautions for the options here are limited and to be honest none of the 3 I have reviewed really deliver to the experience of some of the best in the world and for me some of the best are found in the highly competitive US market with the app from Redfin being a great example.

So let me share my thoughts on the 3 options for New Zealanders, from Trade Me Property, Realestate.co.nz and uniquely a real estate company app from Barfoot & Thompson. I propose to deliver this review in the similar manner as a car review, scoring points based on key categories. These categories are ease of use, content, search and overall user experience.

Just for clarity this review is based on these versions of the various apps:

Trade Me V2.0.13 March 27, 2014

Realestate.co.nz V2.0.2 April 1, 2014

Barfoot & Thompson V1.5 April 2, 2014


Ease of Use

In overall terms, all of these apps are easy to use and fairly intuitive. However to start with extra marks go to B&T for the new overlay intro tutorial which in a couple of screens gives you a great overview of the functions so nothing is left to chance. 

Both B&T & Realestate.co.nz choose to begin the user experience with a map defaulted to your location devoid of any filters. In my view this is the best landing screen for a property app on the iPad. Realestate.co.nz does things slightly better in having a right hand column of listings from the area ranked by latest listed date - a missed opportunity would be the contextual reference numbering which could show the location of these properties on the map.

Trade Me on the other hand defaults to a list view of properties ranked by latest listing but based on the whole database of NZ making the initial experience woefully irrelevant as context is everything! To get to the same experience of a local map as the other two apps takes 3 more taps - a tap too far!

When selecting a listing from the map to view details, B&T chooses to take you to the listing and ignore the location context of the map, whereas the other two provide a hybrid screen of map and listing details. Here there is a vast difference between Trade Me Property & Realestate.co.nz in terms of the amount of screen space given to the listing vs the map. Way too much focus on the map by Realestate.co.nz diminishes the viewing of a listing.

When in this mode it takes just a single tap on a listing pin on the Trade Me Property app to shuffle to another listing - very intuitive. Realestate.co.nz makes you work hard with a required 2 taps to get to a new listings.

None of the apps provide what I judge to be a logical interactive functionality - that being a map with a list of properties whereby the selection of a property on the list highlights (by changing the colour of the map marker) where it is on the map and visa versa - here's this in action on the Redfin app - not a perfect execution but valuable functionality.

The B&T app provides one form of functionality that the other two don't and I love it. It is a flipboard style image viewer which lends itself to the casual, elegant flipping through properties in a magazine style - great execution and a powerful point of difference.



Content - Listings

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Listings are what powers these apps and each have the same core data regarding their portfolio of listings. Clearly in richness of content the B&T app can only showcase their own listings thereby pushing them down the rankings however because they originate the content of the listings they show they are able (or have chosen to develop) functionality that is richer; I speak specifically of videos and floor plans.

Trade Me has the most comprehensive portfolio of listing, especially considering the dominance in rental listings the site enjoys as a function of the private landlord market. Talking of rentals, a point of note is the fact that the B&T app does not feature rentals, only property for sale.

The most important component of all listings are the photos, this is key whether you are viewing on a handheld device or a laptop, but to fulfil the desire of a lean-back browsing based couch device the iPad has to have stunning images. The raw data of image files for each app is identical (although B&T has the advantage of the original raw image files) but sadly Realestate.co.nz lets itself down by what looks like the use of compressed image files designed to be viewed on an iPhone. The sequence of images and 'blow-ups" below graphically illustrates this.

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Content - Complementary data

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I added this category to make a point. That point is School Zones which is the differentiator between the B&T app and the others. Neither Trade Me Property nor Realestate.co.nz offers any complementary data other than listings. But that is what we want! - I hear you cry!

Well there in theory could be so much data that could be of value:

  • Crime stats
  • Flood zones
  • Postcode
  • Sun angles
  • Walk score
  • Transport routes
  • Parking zones
  • High Speed Fibre coverage
  • Flight path routes
  • Rateable value
  • Property valuation estimate
  • Council Zoning

Many of these sets of data are simply not available in NZ or only at prohibitive cost. However the point is valid and I think important. School zones are public data and easily incorporated into an app and yet the two leading players choose to ignore the details. Good on Barfoot's for showing the way.

However B&T don't stop there they also have a tab in the listing view that includes the StreetView from Google - beautifully integrated into the full screen view - beautifully executed!


Search

The Realestate.co.nz app is the only one of the 3 to use aggregation of listing 'pins' which on the zoom out function reverts to a number to show the total of listings in an area. Trade Me uses red pins which cluster on zoom out until they disappear with a notice instructing you to zoom in - not a very friendly experience. B&T adopt a kind of mid solution - red pins which don't cluster but when you click on them on zoom out show a number of listings for the local area.

Only Realestateco.nz uses differentiation in the pin design to highlight 'New' listings, in my view a valuable feature it is the only app allowing you to also filter the search by 'days-on-the-market'. Both B&T and Realestate.co.nz do display 'Open Home' flags on listings with B&T offering an ability to filter the parameter of open homes by 'any time / this week / today / open in next hour' which I find really useful.

In terms of search filter the Realestate.co.nz and Trade Me apps rely on the iOS format scroll wheel for price and tick boxes for other criteria. As noted in the review of the Realestate.co.nz iPhone app the somewhat restricted search ranges especially on price and on bedrooms as compared to the website is surprising. B&T adopt sliders for price, bedrooms and bathrooms, something I find difficult from a user functionality perspective as the finger tends to obscure the slider and there are no visual cues to the gradations on the slider.

A key part of search on any device is the context of location presented by maps - real estate is always conditional on location and therefore despite the fact that the use of the iPad app may be on the couch the map view is important. Here the 3 apps differ, with in my view Realestate.co.nz taking top honours by using the Google map application layer whereas both B&T and Trade Me Property have defaulted to the Apple Maps layer. This is so evident as a drawback when viewing in Satellite mode - the resolution on the Apple Maps layer is so inferior to the Google Maps layer. These images below show the highest zoom in you can achieve in each app before losing resolution - a vast and significant difference.


Overall User Experience

Getting to use these apps begins to show their respective strengths and weaknesses. In reference to my earlier comments, in my view Realestate.co.nz is the weakest, as simply this iPad app is the iPhone app adjusted to fit the format of the iPad, and sadly as noted earlier the issues with screen resolution makes it the least likely app for 'lean-back' browsing. Too often the majority of the screen is taken up with the map view which does not interact with the property or list view in an intuitive manner. It does have the value of the higher resolution satellite imagery but this is not enough to make for the shortfalls.

Trade Me Property delivers a better solution, however given the resources and capability from a company of their size and knowing how critical the property sector is to the overall performance and long term value of this publicly listed company, I would have to say the app delivers at the lower end of expectations. Too much focus remains driven on the user experience of the web and too little time seems to have been spent on experiencing other property apps and other magazine apps in general as a benchmarking exercise.

The winner by a wide margin in my view is the Barfoot & Thompson app. A well executed iPad app that has been thought through and tested to deliver an experience that I would enjoy using - a credit to the marketing and tech team there.

The saddest conclusion though is that the best app is at best a great platform which will be so seldom used as fundamentally who will ever use it? - it showcases just Barfoot & Thompson listings - sure that is close on 4 out of every 10 listings in Auckland, but what use is that?

Given the clear advantage that the app delivers if I was in the role at Barfoot & Thompson I would make a smart decision. I would as a 22.22% shareholder in Realestate.co.nz* license the app to Realestate.co.nz and thereby benefit doubly - prove the credibility of the technical and marketing prowess of the team and at the same time earn a license fee whilst at the same time deliver to Realestate.co.nz as a championing industry owned website to challenge Trade Me a superior app to the current one - food for though!

Note * Realestate.co.nz is a joint venture between The Real Estate Institute of NZ (REINZ) (50%) and Property Page (NZ) Ltd (50%). Property Page (NZ) Ltd is owned by Harcourts Group Ltd (22.22%), Ray White (Real Estate) Ltd (22.22%), LJ Hooker New Zealand Ltd (22.22%), Barfoot & Thompson Ltd (22.22%) and Bayley Corporation Ltd (11.11%)

 

 


Trade Me Property vs. Realestate.co.nz - the debate continues

by Alistair Helm in


My recent article on the state of the online property space here in NZ has raised some interest in the media - clearly the issue is topical, but more importantly there is much at stake. The potential value at play here is anywhere between $100m and $1,400m per annum. The former amount being the total expenditure by the real estate industry on marketing; the latter being the total value of the commission based services charged by the real estate industry upon its clients - the sellers of residential property. Clearly Trade Me is not intending to disrupt the whole industry but equally the real estate industry feels threatened and so their value is under threat!

For Trade Me the goal of the lion’s share of the $100m a year in property marketing is critical. The most recent estimate would put their annual revenue from real estate (licensed agents, excluding private sales) at $15m, this would more than double if not triple if they can secure their new pricing structure. Trade Me is a listed public company and its ambition and its shareholder expectation is to dynamic growth and from that a healthy cash-flow based on an earnings-to-sales rations of over 75%. To achieve this, as they have said, requires a growth in its best performing sector - classifides of which property is the key.

For Realestate.co.nz its goal is to block the Trade Me ambition and in so doing wrestle control of the digital advertising platform from Trade Me so as to provide its shareholders (The Real Estate Institute of NZ (REINZ) and the 5 largest real estate companies) with a cost effective marketing solution; whilst at the same time transition advertising from print to online.

I very much appreciated the very detailed response to my recent article from Jimmy McGee, the Head of Commercial at Trade Me, who has been holding the reins of Trade Me Property awaiting the start of Nigel Jeffries who steps into the role as Head of Property shortly.

His response can be read in full in the comments to the last article. I have chosen to dissect the complete response and in so doing respond specifically to all of his comments, somewhat in the form of a Q&A.

 

Trade Me Property

1. We think things will settle down over time and Trade Me Property will remain an obvious marketing option for agents & vendors. Why:

  • because it is the #1 source of buyers
  • because it has a huge audience
  • because it is great value at less than $200
  • because of our private listings that buyers won’t find on industry websites

 

Properazzi

I would concur Trade Me will remain an obvious marketing option for agents and vendors. More people, more of the time use the web to search and research real estate. In many countries property websites are in the top 5 of all trafficked sites (UK & Australia) Trade Me is certainly a Top 10 website in NZ so it is logical all agents would see it as a valid option.

Anecdotal evidence from agents - in fact almost universal evidence from agents over the past few years from my experience is that Trade Me Property delivers far more buyer leads than any other medium (not just than any other website).

Trade Me audience is huge and brand awareness massive - no question

At a base cost of $159 +GST as recharged by an agent, the cost of a listing on Trade Me is stunning value for money. Nothing comes close - especially not print media with single page insertions costing thousands

The value of the private listings as a unique added content on Trade Me is huge. Up until recently with both Realestate.co.nz and Trade Me Property having the same level of agent listings the advantage to Trade Me has been key - the consumer will always seek out the richest content

 

Trade Me Property

2. Trade Me Property is a compelling marketing option for agents and vendors. It provides listings with huge exposure to a massive audience of passive & active buyers. We know around half of property buyers found their home on Trade Me Property – and realestate.co.nz was well behind with 2%. (These statistics are from a Perspective Research survey)

 

Properazzi

This statistic is not shared lightly and is massive. Trade Me is a publicly listed company and as such has to be carefully and prudent when making any claim - to claim then that a competitor achieves a level of just 2% of all property buyers (in a survey) as compared to Trade Me Property at around 50% is not done rashly or without careful consideration.



Trade Me Property

3. We’re not resting on our laurels. We understand we need to keep working hard to demonstrate the value and effectiveness of Trade Me Property as a marketing option for agents and their vendors – it’s not something we take for granted. As we’ve always said: “You should only use TMP if it helps you sell houses.” We’ve recently released aerial boundary images, will show school zones soon also. Plus well have map-based search for desktop out in a month or so. And last but not least, we’ve got some exciting stuff in store for our mobile products.


Properazzi

Now this is where I think that Trade Me Property has been deficient for a considerable amount of time. They have not been a significant innovator. Even today the user experience of Trade Me is of a single unified platform built around auctioning household items which leaves the properties section woefully underserved as compared to other property portals overseas. I would have to say Realestate.co.nz has not been that innovative, however their latest version of their iOS app is a good step forward, despite the stumble!

Trade Me Property has been weak in delivering a credible mobile experience - certainly as they cite later in their response, many people may well use the general Trade Me mobile app for property searching but it is not a step forward in property  searching merely a mobile version of the web search.

 

 

Trade Me Property

Trade_Me_Property_on_the_App_Store_on_iTunes.png

4. There’s a sense of back to the future: we’ve been here before. TMP was started from scratch back in 2005 at a time when the RE industry had their own website with thousands of listings on it. There are important philosophical differences between TMP and industry sites including::

  • TMP is designed to empower consumers and puts private listings and agent listings on a level playing field.
  • TMP is independent, not industry-centric, and aims to provide buyers with as much transparent information as possible.
  • We believe that over the long-term, loyalty from buyers and sellers will come via TMP being an effective and good value marketing option, and providing users with the best experience. 

 

Properazzi

I would agree there is a sense of Back to the Future here. Back in 2008/9 there was a stand-off by the industry resisting the desire to have their listings on Trade Me. In 2006 only around 30% of licensed listings were on Trade Me. By 2008 that had risen to 65%, but some of the major groups held out, most notable Harcourts. By 2009 all groups were on Trade Me Property, not for the reason of negotiated buying rates, but simply because vendors demanded agents put their property on the site, these agents demanded that the business owners agree to list on Trade Me. Today we have the opposite effect of business owners telling agents to tell vendors that they don’t want to be on Trade Me - because they don’t want to pay $159 + GST to market their clients property!

I would agree Trade Me has always been about empowering consumers. However it has also always been about creating value and enhanced shareholder wealth.

Trade Me is independent as much as Fletcher Building is independent or any other publicly listed company is. It's a publicly listed company with shareholders and a board of directors representing those shareholders who hold the executive team to account to enhance the value of the company. It's there to make money - Trade Me is not a charity.

I think the comment “not industry-centric” may have been a mistake, for a property portal to be successful, it has to be customer centric where the customer in this case is the agent. Not the consumer, and thereby the business has to be 'industry-centric'. I think in someways this is at its core, one of the issues that has caused the problems in Trade Me Property this year.

 

 

Trade Me Property

It’s fair to say we’ve got some concerns about the flyer and the overall impression it creates that the industry-owned site has both more house listings and more traffic than other websites. We think this is off the mark.

Total listings:

The nationwide picture is distorted by the actions of some agents who withdrew listings in Hawkes Bay & Hamilton. TMP still has more residential for sale listings in a bunch of areas, including Auckland, Wellington & Canterbury.

This analysis includes lifestyle listings, where we have 1,000 fewer listings than RE. We’ve probably lost a bit of ground there to the way we’ve treated lifestyle listings, rather than agent backlash. We currently exclude lifestyle from residential search, which we’re looking to change soon. We expect this will make it a far more compelling proposition for agents and vendors of lifestyle properties.

 

Properazzi

Whilst Trade Me might have concerns over the flyer, my analysis shows the statements made have validity. At this time Realestate.co.nz does have more listings. 

I have gone back to examine the listings data as at the 6th April utilising the same methodology to compare each category of listing on both sites across the main metro centres.

Auckland sees Trade Me Property with 6% more listings overall, however when stripping out an estimation of privately listed properties to examine side-by-side licensed real estate listings Realestate.co.nz has 479 more listings - an advantage of 5%.

Untitled_2-11.jpg

In Wellington the two websites classify the region geographically using differing boundaries, for the sake of comparison I have excluded from the Trade Me Property listing the districts of Carterton, Masterton and South Wairarapa which are not included in the Realestate boundary of Wellington, thereby as best as can be evaluated the listings data is like-for-like.

Wellington sees Trade Me Property with just 1% more listings overall, however when stripping out an estimation of privately listed properties to examine side-by-side licensed real estate listings Realestate.co.nz has 346 more listings - an advantage of 12%.

Canterbury sees Trade Me Property with 11% more listings overall, however when stripping out an estimation of privately listed properties to examine side-by-side licensed real estate listings realestate.co.nz has just 92 more listings - an advantage of 3%.

So it is fair to say that in the major metro regions of NZ Trade Me Property have more listings, however from a consumer standpoint to be able to examine the true comprehensive picture of all property advertised for sale you would need to use both websites.

As the analysis includes Lifestyle properties the comments about the display structure of these listings on the Trade Me Property site is more an internal issue for the company and its design team.

 

 

Trade Me Property

Audience: Trade Me Property’s audience (average daily unique browsers during March 2014) as independently measured by Nielsen, is more than 3x the audience of any other property website in NZ. Looking at data from the past 7 months, Trade Me Property’s monthly audience has included an additional 76,000 and 92,000 more browsers each month than any other competitor site. According to Nielsen, 77% of visitors to TMP didn’t visit RE (Feb ’14, NetRatings, total traffic).

 

Properazzi

I am grateful for the exact Nielsen data provided in the response. I have mapped the data and added it to the chart Trade Me Property also presents on its agent home page which shows data from April 2012 to March 2013. As can be seen the differential between Trade Me Property and realestate.co.nz is significant. Trade Me Property has 3 times the average daily traffic but a year ago the differential was 5 times and 2 years ago the differential was 6 times. In March realestate.co.nz average daily visitors were up 95% as compared to a year ago - Trade Me Property average daily visitors up just 8%.

 

Trade Me Property

Hawke’s Bay listing numbers:

Some agents are disregarding their vendors’ best interests.

Agents in some parts of the country are taking advantage of their role as a trusted advisor and using vendors as pawns in a real estate industry power play.

Not having listings on Trade Me Property means less people will see the house for sale which means the vendor is less likely to sell, or get the best price.

We don’t believe these realtors have their clients’ best interests in mind as their clients’ properties are not being seen on the country’s best property marketing channel.

We think agents should do what is best for their vendor, and that would generally include using Trade Me Property as a way to get properties in front of the largest audience and helping them sell more property.

 

Properazzi

I believe some of these comments are valid. Given the significantly larger audience to Trade Me Property and the data on those who visit Trade Me Property and not Realestate.co.nz then an agent not advertising a clients property on Trade Me Property is disregarding their clients best interest. Further this action of refusing to advertise or telling clients that they don’t recommend Trade Me Property is using clients as pawns in a power play that is out of all proportion - a fee of $159 + GST is the cheapest form of advertising. It's time the agents woke up to demonstrating their role and either pay it out of their commission or re-charge it.

Stating that not advertising on Trade Me Property means less people will see the house for sale which means the vendor is less likely to sell, or get the best price, is a serious stretch. This can never be proved and as I have written recently property sales never have a ‘control’ environment.

 

Trade Me Property 

We understand why you’ve compared the iPhone app for TMP and RE, but it’s only part of the picture. This is because as well as the TMP app, heaps of New Zealanders use the TM app to browse for property on their iPhones. Nielsen’s research has also found that more people downloaded or used the Trade Me app to search for property than the Realestate.co.nz app.

 

Properazzi

Whilst the fact that ‘heaps’ of New Zealanders may well use the standard Trade Me app to browse property on an iPhone, that experience is not comparable to the inherent value of a mobile app for property which is what both the Trade Me Property app and Realestate.co.nz app deliver - the battle grown is now, and in the future the mobile space / app environment. If Trade Me Property want to win this battle they need to avoid relying on users engaging with Property on their main app. My advice would be to exclude property listings on the main app and create a mindset change that will get those users to download the property app.


Realestate.co.nz making serious moves on Trade Me Property

by Alistair Helm in


There has not been much commentary for well over a month on the tension between Trade Me Property and the real estate industry - up in arms over the new pricing structure. That was until this marketing flyer hit the digital wires today. Proclaiming that traffic and activity on the industry owned website of Realestate.co.nz has "gone through the roof".

These are some significant stats and naturally I am always keen to look into the numbers, where I can, to provide what I see as valuable insight.

 

1. More homes for sale than anyone else

Based on my own analysis as of today (2nd April) this is most definitely true. Not just more, but significantly more!

For the past 3 years at least Trade Me Property has had a subscriber base at least equal to Realestate.co.nz or close enough to make little difference and so from the perspective of licensed agents the two sites have been line-ball. On top of this Trade Me has an additional stock of listings from private sellers which on average have amounted to around  16% of the Trade Me listings which generally means Trade Me has around 18% to 19% more listings than Realestate.co.nz.

As of today that advantage to Trade Me has disappeared and Realestate.co.nz not only has more listings (a margin of 4%) but by applying an estimation factor for private listing, Realestate.co.nz has considerably more licensed agent listings (a margin of 18%).

In seeing this significant advantage to Realestate.co.nz I was naturally drawn to look at the hot-spot of the Hawkes Bay where the boycott against Trade Me continues and has seen a large proportion of agents listings only appearing on Realestate.co.nz. The actual make up of listings on both sites as of today in the Hawkes Bay are as follows.

This is staggering. In the Hawkes Bay Trade Me Property is only displaying 428 houses being marketed by real estate agents for sale as compared to 1,103 houses on Realestate.co.nz - I know where I would be looking for property for sale for sure in this area of the country!

 

2. More Traffic

The marketing flyer speaks to a lift of 30% in traffic over the past 6 months quoting Nielsen average daily unique browsers, certainly a very credible source of data. Not having access to Nielsen data I turned to a source I use quite a bit these days Similar Web. This service provides estimates of website traffic, by no means as accurate as Nielsen of Google Analytics but useful as far as seeing trends.

The trend since the start of the year has been of a significant growth backing up the more credible Nielsen stats.


No. 1 Property App

The Realestate.co.nz iPhone app was the first mobile property app in NZ, leading Trade Me Property by 18 months. Since that launch in late 2010 the app has been downloaded more than 200,000 times and rightfully can claim the mantle of the No. 1 property app in NZ.

The marketing flyer speaks to the download rank as the demonstration of leadership quoting "iTunes & app annie download rank of property apps in NZ". The source of this ranking data is App Annie which tracks the ranking of all iOS and Android apps. For the sake of relevance I have only examined the iPhone app download ranking as Trade Me Property does not have an Android app and the Realestate.co.nz iPad app has only just been launched.

The charts below show the past 12 months for the Trade Me Property iPhone app and the Realestate.co.nz iPhone app.

The Realestate.co.nz app is being downloaded at rate which consistently places it at around the 320th most popular app in NZ, whereas Trade Me Property app is further down the rankings at an average of 500th place.

These collective stats do provide (not that I was sceptical) a very clear demonstration that the battle for supremacy in the property portal space in NZ is actually not that clear cut and certainly in the past 4 months things have begin to change. I am not saying that Trade Me is wounded, but at the same time their is a clear demonstration that Realestate.co.nz is gaining. They do however need to make sure they attend to the detail, like for instance their version 2.0 of their iPhone app which was poorly tested before bugs were discovered which could have seriously undermined their credibility in that key space.

 


Realestate.co.nz releases a new version of it successful mobile app for iPhone

by Alistair Helm in ,


Update 2 April

This article was written on the 27th March based on the then Version 2.0.1 of the app. On the 1st April a Version 2.0.2 was released that has dealt to all of the issues in this post. 

I am pleased that the company was able to respond so speedily to these issues which I judged to be significant. Clearly the development team is passionate and responsive, it is just a pity that inadequate testing lead to the Version 2 and Version 2.0.1 release without user testing. My opinion of this app has always been positive as in my mind it remains the best app for the iPhone on the market.

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There is no doubt that Realestate.co.nz gained a significant advantage over Trade Me Property when it launched its iPhone app in November 2010. It would be another 2 years before Trade Me released their first dedicated iOS property app. That early advantage has been key to the brand’s development and appeal over these past 4 years.

So, more than 3 years after its initial launch and save for a couple of bug fixes and an upgrade to allow for synchronisation of favourites; Realestate has recently released a whole new Version 2 of its app and I have been naturally keen to try it out to assess the developments that have been implemented.

Quoting their own summation of the changes on the App store, the new app delivers these benefits:

As they also rightly point out one of the great new features is that there is now a true iPad version - something long overdue as Trade Me Property has been the only purpose designed iPad property app for nearly 2 years.

Mobile apps are critical for property portals as the trend is ever more focused to mobile usage when searching for property. In the US, UK and Australia, the leading portals attract well over half of all visitors via a mobile device, with the US portal Zillow claiming weekend mobile activity approaches 70% of traffic. With this as a backdrop, delivering the best user experience on the mobile platform is critical for any property portals. 

Sadly I have to report that Realestate.co.nz appears to have let itself down with this V2 in what appears to be a 1 step forward, 2 steps back release. Whether it is a case of a rushed release or inadequate testing, this version has some serious weaknesses. This could have very serious consequences on the brand and the business especially considering how competitive this portal space is today in NZ. (By the way, I have deliberately waited a couple of weeks after the initial release of V2 to write this review to ensure that if they had spotted these issues, then I was prepared to allow them time to correct these issues. In fact they have already released an update with V2.1 a couple of weeks after the V2.0, however as I see it and detail below there remain serious shortfalls).

Let me work my way through the features, benefits and my critique of the this app on the iPhone, I will leave the evaluation of the iPad for another article.

iPhone app

First impressions

The start up of the new app is in many ways cleaner and clearer than before. There is no home screen. Instead the first screen takes you immediately to a local map indexed to your location - great! exactly how the user wants to engage with mobile real estate “show my what’s for sale around me”. In the same way as before listings are signified by red pins with open homes and new listings using cleaner iOS7 icons than the prior flag icon - nice.

Untitled_2.png

Touching a listing pin shows the address exactly as before. However I continue to maintain that this is a missed opportunity as most other property apps bring up a thumbnail image of the property or some details in brief vital to make searching easier, as it avoids having to move through to the listing to validate the property, as ably demonstrated by the example from Realestate.com.au.

When you do go through to the listing you do get the same details page with the great image viewer as smooth as ever. Overall the format is certainly cleaner, very reflective of the iOS7 template.

On each listing the key tabs of Details, Inspection, Affordability and Agent are arranged neatly and carry out the same functionality as previously.

Another missed opportunity in my eyes though is the enquire service. With such extensive usage on the smart phone of this app, why could the enquire service not include a text message integration with the phone - certainly there is a cost associated with sending what may be thousands of texts, but the value would far outweigh the cost. The only option is to type in an email which does not pre-populate with your details as a default.

Map Search

Back to the map, and the first functionality change that frustrated me. In the original V1 version there was a clear ‘Refine” button which allowed you to filter your search on any chosen map area. At first viewing I found no refine button. Trial and error lead me to the search button which had the required filters. However upon making this necessary filter of beds, baths and price; I tap the search icon fully expecting to be taken back to the local map - no! I now get a map of the whole country filtered for my 3 beds, 2 baths $500,000 to $600,000 !!

This is a serious issue as all I wanted to do was refine my local search - I was after all doing a local search around me. After picking up my iPhone back from the corner of the room where I had thrown it… I thought to try the GPS location icon at the top of the screen and low and behold I am back to my local map. Why oh why do I have to jump through hoops now, to do what used to be so easy!!

2014-03-27_19_21_53_png.png

This experience really concerns me as one of the beautiful user experiences I liked with the original version was to effectively “fly around the country” seeking out what is for sale based on the map search - how can I now do this now, when if I want to refine my search, I end up looking at the  whole country?

After random trial and error sometime later I did notice that in the search options there is a filter that says ‘Current Map Location’ - but it is by no means easy to find hidden as it is under Regions! User testing would have highlighted this shortfall I am sure.

 

Search refinement

Another grumble in what I would have hoped would be an improved V2 of the app would be around the search filters of beds, baths and price. The ideal I would have thought would be to replicate search filters of the web on the mobile app - allowing for example to be able to search for properties having between 2 and 3 bedrooms. No - you can only choose 2+ on the app, which clearly gives you 2,3,4 and 5 bedroom houses. Also the website allows for 25 price segments, whereas the app you have to choose from just 16 - hardly a ‘mobile-first’ approach.

Synchronisation with Favourites

Some of these preceding issues may seem small and in someways they are, however the next one is a whopper. Where has the synchronisation between the web and mobile app gone if you have an iPhone 4 or 4S?

Simply put, the developers of this app clearly only tested on the iPhone 5 for as the screenshot below demonstrates the layout is optimised for the longer screen of the iPhone 5. On a 4 or 4S the bottom of the screen is cut off thereby effectively relegating owners of these models to a far inferior app! I thought that the V2.1 would fix this - but not happening. It’s like I can see where the function link is in the filter section but it looks to be hidden? 

Listing Search

Another significant failure of the app is the ability to search by listing number. The search function has a classic search box as in the original version to allow access to a single listing by entering a listing number, so allowing you want to look up details on a property having seen it in a newspaper or street sign. Try as you might (as I have done) it does not work. Worse still some listing numbers take you to other places in the world - try 013 and you end up in northern Holland, 0555 takes you to Pensacola in Alabama!

I did after a couple of tries notice this small text below the search box "Start Property ID with a #"! - how bizarre, this was not a requirement of the original version of the app, why now do I need to add a # to the ID number? - sadly this advice proved useless as adding the # did not aid searching - the search by ID number seems broken - please fix! 

The example below demonstrates the issue. Listing number BOT21586 is a 3 bedroom property for sale in Pakuranga, one of thousands of such properties for sale. Enter BOT21586 on the app and you get a notice "No location could be found", search #BOT21586 on the app and you get a notice "No listings with that number could be found" - but do a map search for 12 Elizabeth Street and the listing can be found on the app and the listing on the app has the listing number #BOT21586 !

Enough of the negatives I hear you cry! - so what can I praise ? - well the open home calendar sync is beautiful and super smooth. The open home times are laid out in a logical position and tapping the chosen time and adding it to your calendar is great. There you go.

Other than that and the above mentioned examples of issues, I still think this is a good app. I am just surprised and disappointed that the app does not seem to have been tested adequately.  In my opinion technical developments of this nature have to take a significant step forward and add features that enhance the experience. I would have to say that overall this version 2 is a case of form over function, of a desire to create an iOS7 look driven by the need for an iPad app which then spawned a iPhone app as a secondary outcome with many resulting issues.

It will be interesting to see if these issues are addressed in the coming months.

 

Disclaimer: I was formerly the CEO of Realestate.co.nz from 2006 to 2012. I now have no relationship with the company, nor with its competitor Trade Me Property. I have written this review as an impartial objective analyst and commentator on the real estate industry in NZ and overseas. In my current role I do advise and assist other property portals in other countries on strategy and operations and thereby judge that I am in a position to offer such a review, for no other reason than professional advice.


Agents boycott of Trade Me hurting vendors

by Alistair Helm in ,


We say no to Trade Me.png

This week has seen significant media interest in the boycott of Trade Me Property by agents particularly in the Hawkes Bay and Hamilton City. Articles written have proffered opinions that "The real estate industry has a lot more to lose than Trade Me" and gone as far to look to whether the Commerce Commission will investigate the potential breach of the Commerce Act or whether the governing body of the Real Estate Agents Authority will clarify if the action of these agents is against the best interests of the vendor as the agents clients.

I shared my opinions with Bernard Hickey as in my judgement this is a matter that should not result in vendors' property listings being used as pawns in this standoff.

The fact is that there are vendors in these two regions of the country who are missing out on valuable marketing on Trade Me and as ever with the web, the data is there to back up the story.

Firstly look at listings. Generally Trade Me and Realestate.co.nz enjoy the support of all licensed real estate agents across the country (up until this time), Trade Me holds a larger stock of listings nationally as they feature private sale listings which are usually around 15% to 18% of the total of property for sale.

Looking at the Hawkes Bay data on the respective websites today based on comparable listings of residential and lifestyle property shows that there is most definitively a boycott. Compared to a similar sized area such as Tauranga the Trade Me listings are down 55% as compared to Realestate.co.nz in the Hawkes Bay whereas the listings ratio should be similar to Tauranga with around 15% to 20% more - this means that around 1,000 properties in the Hawkes Bay are not being featured on Trade Me Property. These are listings from offices of Property Brokers, Tremains, Sotheby's and others. Importantly these offices have withdrawn all the listing - recent listings as well as older listings.

Agents boycott Hawkes Bay.png

These c. 1,000 listings are not attracting potential buyer interest from the more than 120,000 property buyers per day using Trade Me Property.

As a buyer accustomed to using Trade Me when searching for property there is no recognisable experience that will tell a person that there has been a boycott. The functionality of the web allows for tailored searches by location, price and type and at no point do you get a sense of the number of listings in relative terms. That is why the level of viewing of individual properties in the Hawkes Bay has not changed since the boycott began. This can be proved by this simply analysis.

Taking two properties that are advertised by Ray White (who have made no mention of their intention to join any boycott) that were both listed on the 5th February. The level of viewing on these properties comparing Realestate.co.nz and Trade Me continues to show the general trend of a 10+ fold higher viewing on Trade Me Property.

Hawkes Bay 1.png

 

Now look at a couple of examples of the c. 1,000 listing not shown on Trade Me Property, they are not getting more viewing on Realestate.co.nz because they are not on Trade Me - here are comparable stats. It clearly shows that there is no greater viewing on Realestate.co.nz because these properties are not on Trade Me Property.

Hawkes Bay 2.png

The vendors of these properties are not receiving the exposure they should. The scale of the loss is substantial - every day these c. 1,000 properties are missing potential buyers which has the potential of lessening the sale impact and competitive pressure in the market. The fact is the medium of choice when searching for property by over 90% of home buyers is the web. There are only two websites for real estate in NZ and Trade Me dominates to such an extent that not being on the site is marketing madness.

What perplexes me is that the real estate industry continue to think of online advertising as a cost, in the same way as they think of the photocopier as a cost or the phone system. They do not think this way about their preferred medium of choice - the newspaper or property magazine, that they think of as a re-charged advertising medium.

A single property advertised on Trade Me Property cost them $159 + GST. That advert works everyday to market that property until sold and would costs private seller upwards of $400. So why don't they front up to their clients and say " Our recommendation is that we market your property on Trade Me Property at a cost of $200 and Realestate.co.nz for $100 - that way your property will reach 90% of buyers" (that cost includes a small margin for admin - which they need to disclose under the REAA). If they are not confident to ask for the money upfront they could suggest adding it to the commission upon the successful sale.

This boycott is hurting the clients of these real estate agents, vendors will very soon be up in arms and potentially pulling their listings and moving across to agents who don't treat their property as a pawn in the internal squabble between Trade Me Property and the agents. These agents would be wise to reflect that to the average kiwi Trade Me is far more loved than a real estate agent!

 

For reference here are the links to these listings highlighted above:

Ray White Listing #1 "When location counts" on Trade Me

Ray White Listing #1 "When location counts" on Realestate.co.nz

Ray White Listing #2 "Seriously Special" on Trade Me

Ray White Listing #2 "Seriously Special" on Realestate.co.nz

Property Brokers Listing "Rural views" on Realestate.co.nz

Tremains Listing "Modern Brick Home" on Realestate.co.nz


Adjusting to a new normal in the property market

by Alistair Helm in


The latest monthly report from Realestate.co.nz tracking the supply side of the property market headlines a story that has been consistent for well over 2 years now. Step back to December 2011 and the report headlined "Active property market still favours sellers". The fact is we have been experiencing a property market with what we constantly describe as a shortage of supply for close on 3 years now. 

At some point you have to ask are we merely living in an aberration of the norm, or is this the norm?

The chart below ably demonstrates the supply constraints which the market has experienced as measured by the availability of houses for sale set by the number of weeks it would take 'in theory' to sell all the current stock based on current rate of sale per week.

Inventory Nov 13.png

We certainly experienced a period when inventory levels exceeded a full year and topped 60 weeks back in 2008, but for the period of the last two and a half years the level of inventory has settled to around 6 months levels.

The fundamental problem we face in analysing the property market is access to data. In regard to sales data we have through the Real Estate Institute sales data by month going back to 1992 which allows us to identify the cycles of the market - the highs of the mid 90's, the lows of the late 90's the bubble of the mid '00's and then the crash and subsequent recovery. However when it comes to supply data we are limited to the past 7 years as the database of Realestate.co.nz only really became reliable from January 2007.

It is therefore somewhat risky to assume that the levels of inventory below the 26 week level is exceptionally low and assume that the 7 year average of 37 weeks is the norm. It is quite likely that the norm may actually be 26 weeks and the 50+ weeks levels the aberration. In fact from a cursory reference to some overseas markets 26 weeks seems to be the norm.

Supporting this proposition is a further analysis I have undertaken on available data examined the trending of both sales and listings across the country over the past 5 years using a 12 month moving average to eliminate any seasonality and look to see a long term trend. The insight is valuable.

NZ sales & listings trennd Nov 13.png

This chart highlights in grey the fact that the variance trend in sales is more significant than that in listings - not surprising to some extent as listings volumes have tended to be around twice the number of sales, but what is very interesting is the past 6 months right up to November where there has been effectively no growth in the 12month average number of listings yet sales continue to growth on a moving annualised basis of over 10% - so we continue to see sales rising far faster than listings.

With this as an interpretation of the status of the property market it would now seem to be illogical to constantly scream that listings are in short supply - are they really?!

I am now more than ever convinced that what we are really seeing here is a maturing of the interpretation of the data around listings and inventory such that in overall terms I judge that the NZ property market is actually pretty well balanced with 26 weeks being the norm and the current level of 24.8 weeks being right on the norm. After all if this was a supply constrained market would we not expect to see either of growing listings or erratic buyer behaviour (although I suspect some would argue the rise in price is just such an erratic behaviour).

Clearly taking this approach to a new norm would mean that some regions are actually in buyers' markets whilst other are actually less likely to be in severe sellers' markets. In terms of the Property Dashboard could this actually be a truer reflection of the NZ property market?

Untitled-10.png

 

 


At last some easing in the property market

by Alistair Helm in ,


The latest NZ Property Report released today by Realestate.co.nz for the month of July for the first time in what seems like an eternity shows that the pressure in the property market caused by a shortage of listings may be easing.

In July 9,857 new listings came onto the market, which compares with 9,411 in July last year. Not much of an increase you might well say but given the fact that the past 5 months have all seem lower numbers than a year previous – it is good to see greater choice.

This increase in new listings however did not actually increase the available stock on the market. At the end of June there were 37,615 properties on the market, by the end of July that had fallen by 1,383 to 36,231. However available stock of property on the market is not the true test of the state of the property market; for that you need to look at the rate of sale. For June the sales on a seasonally adjusted basis were down from 6,748 to 6,217.

So with an increase in new listings matched to a slower sales, the inventory as measured by the number of weeks of equivalent sales actually rose in July. The Property Dashboard for July shows a level of 26.7 weeks  - still placing the market firmly in favour of sellers but some easing does bring some hope for buyers.

Across the country the picture reflected the national trend with 9 regions experiencing a sellers’ market as compared to 13 last month. For the first time for quite a while one region – the West Coast of the South Island is showing a buyers’ market.


Realestate.co.nz iPhone update - the return of Google Maps

by Alistair Helm in


Realestate for iPhone, iPod touch and iPad on the iTunes App Store.png

It was just over a year ago that Apple took a bold step that ultimately lead to massive backlash, as it deleted Google Maps as the default mapping platform for iOS devices (iPhones and iPads) and replaced it with Apple maps. Now in many countries the change was not so bad, but in NZ the change was dramatic especially when viewed by satellite image.

Apple had not even come close to providing the resolution quality of Google Maps - so for Apple iPhone and iPad users they had to accept that situation or download another app such as MapQuest, at least until December last year, when a native Google Maps app appeared in the apps store.

However for applications such as the Trade Me and Realestate.co.nz apps which rely so heavily on the default mapping platform, there was at the time no alternative and as such the user experience fell seriously backwards in June last year with a very poor low resolution experience for satellite view of property on the app.

Now I am delighted to see that Realestate.co.nz has released a new version of the app (Version 1.5) which uses Google maps again as the underlying platform layer for satellite and street maps. 

It's funny but it is not until something is taken away do you realise how much you missed it! 

This return to the Google maps layer for the Realestate.co.nz suddenly in my mind catapults the app far ahead of Trade Me Property app, a far cry from the rating I gave it just 4 months ago - especially as both now have synced integration of saved properties between web and mobile. 

Just look at the side by side comparison between the apps for the same property on the market. The image on the left for the current version of the Trade Me Property app in satellite view mode is the highest zoom before you loose image - the Realestate.conz app on the right uses the same zoom - staggering difference!!

Trade me app vs Realestate.co.nz app.png

Then the Realestate.co.nz app satellite view gets even better given the quality of the underlying image resolution allowing the tighter zoom-in as shown from the screen shot on the right. 

 

Zoom in Realestate.co.nz app.png

In my view this now places the Realestate.co.nz app as the must-have for mobile property searching. 


Gap between asking price and sales price narrows further

by Alistair Helm in


It is interesting to compare the expectation of property prices to that of actual sales prices, as in theory it provides a guide as to the state of the market. The closer aligned they are the more realistic are seller expectations, a situation more common in a rising property market. Conversely the more divergent, the more out-of-touch are the sellers’ expectations, usually as a consequence of a falling market.   

Today’s market is certainly not falling (well not at the moment) and presented below is the trending chart of asking prices and sales prices for the past 6 years covering this important period from just before the property crash, right up to date – May 2013.

NZ asking price to sales price gap May 2013.png

It is only in the past 6 months that the divergence between asking price and sales price when seen on a 6 month moving average basis has reduced to below 10%, a level it passed through in 2008 on the way down to a gap of 15%.

Across New Zealand the stratified median sales price for property rose again in May to $415,325. That places the median price of property across the country some 9% above the peak of the property market pre-global financial crisis back 6 years ago in Nov 2007. These figures are taken from the REINZ stratified house price index, in my opinion the most reliable indicator of house prices. However when viewed against the bottom of the market in January 2009 the market is up 23%.

 

REINZ NZ strat price May 2013.png

At the same time the asking price for NZ property has risen in May to a new record level of $454,795 based on the data collected by Realestate.co.nz in their NZ Property Report. This record high is up 7% from the peak of the market pre-global financial crisis back in January 2008. When measured against the bottom of the market in November 2008 the asking price expectation has risen a more modest 14% over the period.

 

NZ asking price May.png

Auckland Property Market

In the Auckland market the gap between asking price and sales price is much closer than across the whole of NZ. It is now back with sales price within 5% of the asking price on a 6 month moving average basis. A significant tightening as compared to the 15% gap back in early 2009.

 

Akl asking price to sales price gap May 2013.png

The stratified median sales price for property in Auckland rose again in May breaking through the ceiling of $600,000 for only the second time. That places the median price of Auckland property some 19% above the peak of the property market pre-global financial crisis back 6 years ago in July 2007. However what is somewhat more alarming is the fact that since the bottom of the property market in Auckland in November 2008 the stratified median sales price has risen by 39%. 

 

Akl strat price May 2013.png

At the same time the asking price for Auckland homes has risen to see in May a new record level of $631,656 based on the data collected by Realestate.co.nz in their NZ Property Report. This record high is up 16.5% from the peak of the market pre-global financial crisis back in January 2008. Since the low point in asking price of October 2008 the mean asking price has risen by 26% to the new high of $607,600.

Akl asking price at May 2013.png

As to the future, the analysis of the past shows that on the way down as we can see in 2008 the asking price lead the change to reverse the decline as vendors started to establish a base of asking price expectation which at the bottom of the market was met by demand and that began to fuel a rise in sales price. This time around we will need to watch for a turn in sales price as this will lead the asking price trend by at least 3 months.


Auckland house buyer frustration is not a supply problem – it’s all about growing demand

by Alistair Helm in


The Auckland property market is not suffering from a low level of listings. The property market in Auckland is experiencing a lack of selection of property to buy caused by high demand which is depleting inventory.

It may seem a pedantic point but I think it is important. The analogy would be for a warehouse where the shelves seem only half full. The delivery from suppliers has not changed much over the past year but with more people coming into the warehouse and buying – even buying the dented and dusty products there is less stock on the shelves.

Looking at the data from REINZ and Realestate.co.nz published monthly highlights exactly what is going on and thereby avoids alarmist or self-serving statements like “number of properties being listed for sale was still way down" as stated by Helen O’Sullivan of REINZ, and "It's quite a battle to find the house that you actually want to buy, because of the low number of listings," from ASB chief economist Nick Tuffley.

Real estate agents want to talk about low levels of new listings, as their business is to list properties. It is admittedly hard to quantify demand in the property market, as sales volume is a resultant outcome of satisfied demand, unsatisfied demand that is sure to be high in the Auckland market at this time is harder to quantify.

The facts as shown by the data of new listings from Realestate.co.nz shows that for January the number of new listings coming onto the market was no lower than the past 4 years of January’s – January is a low month.

Auckland new listings Jan 2013.png

Examining the seasonally adjusted numbers from Realestate.co.nz as the chart below shows provides a useful perspective – January represented a very average month at the seasonally adjusted level of 3,594 new listings – there were 23 months in the past 4 years with less listings and 25 months with more listings.

Auckland seasonally adjusted listings Jan 2013.png

The core number to examine is inventory – the number of properties on the market. At the end of January this year there were 8,622, a year ago there were 11,162, in January 2011 there were 13,349 and in January 2010 a total of 13,396.

Property sales are up and property is selling faster. Very importantly there is less “redundant stock” on the market – property that at one time in the past 4 years might have been hard to sell is now selling; thereby reducing the available selection of property on the market.

This is best shown in the chart below which shows actual sales, listings and inventory of houses on the market over the past 4 years – that red line showing the extent of the decline inventory is the most telling.  As the sales over the past 3 years (as shown by the yellow average sales line) goes up so inventory falls.

Auckland - sales listings inventory Jan 2013.png

Quarterly trend for supply and demand in the NZ property market

by Alistair Helm in


The core analysis of the property market as with any market is the balance between supply and demand. In the case of property this relates to sales and listings - the balance represented by sellers and buyers.

Each month the relevant data is published, in the case of sales by the Real Estate Institute and for listings by Realestate.co.nz.

In the past I have liked to aggregate these two sets of data to see the trend in these two indicators paired up. Analysed on a quarterly basis, the reports for the whole country as well as each region provide a valuable view of where the market is heading.

The last such report was published in July for the 2nd quarter of 2012. I have updated the data and provided below the charts for the final quarter of 2012 - the 3 months ending December.

Total NZ

The level of sales in the final quarter of 2012 increased again up 27% vs prior year whilst new listings were up only 4% indicating that the overall market in NZ rmains tight with a strong demand and limited supply.

NZ Quarterly supply & demand Q4  2012.png

Auckland

Sales in Auckland in the final quater of last year staged another leap with a 39% year on year growth, this is now the 8th straight quarter of consecutive growth. Whilst listings are showing a consistent 4 straight quarters of growth their rate of growth is far behind the growth in sales.

Auckland Quarterly supply & demand Q4 2012.png

Wellington

Wellington saw a strong surge in sales in the final quarter up 25 on prior year, however as with so many regions the level of new listings failed to keep pace with this demand only rising 4% year on year.

Wellington Quarterly supply & demand Q4 2012.png

Canterbury

Sales in the Canterbury region were up 11% in the final quarter of 2012 with new listings up just 2%, these rises are modest as compared to the earlier period in the year; however that period was off the very low base of the earthquake in the first quarter of 2011.

Canterbury Quarterly supply & demand Q4 2012.png

Northland

Sales in the Northland region enjoyed a strong surge in the final quarter of 2012 rising 37% year on year. The year overall has seen strong growth in sales volumes. However on the supply side listings wre down 4% in the quarter and show a steady decline in growth through the year indicating a tightening of supply.

Northland Quarterly supply & demand Q4 2012.png

Coromandel

The property market in the Coromandel lags behind the growth in other regions of the country with sales down 3% in the final quarter following a 20% growth in Q3. On the supply side the market has seen a resurgence of listings up 11% year on year in the final quarter.

Coromandel Quarterly supply & demand Q4 2012.png

Waikato

Sales grew by 27% in the final quarter of 2012 as compared to the prior year up from 13% in the third quarter. Listigs coming onto the market though rose only 7% indicating the tightening in the market.

Waikato Quarterly suply & demand Q4 2012.png

Bay of Plenty

Sales surged in the final quarter of last year in the Bay of Plenty up 28% year on year, however listings are failing to respond fast enough to this surge with just a 3% rise in the quarter following a 9% fall in the prior quarter, adding to the tightening of supply in this region of the country.

Bay of Plenty Quarterly supply & demand Q4 2012.png

Gisborne

The property market in Gisborne continues to experience a strong resurgence with sales up 40% year on year in the final quarter and new listings up 14% - somewhat behind sales but tracking in the right direction to support the new highly active market.

Gisborne Quarterly supply & demand Q4 2012.png

Central North Island

The property market in the Central North Island continues to contract with sales only up 6% in the final quarter tracking a declining trend of growth through the year. Listing equally have been seeing slower growth with the final quarter seeing a 15% decline year on year.

Central North Island Quarterly supply & demand Q4 2012.png

Hawkes Bay

Property sales in the Hawkes Bay saw a strong surge in the final quarter of last year up 32% year on year. Listings also rose 12% to demonstrate an active and well balanced market.

Hawkes Bay Quarterly supply & demand Q4 2012.png

Taranaki

A very strong end to the year saw sales in the final 3 months of the year surge 30% in the Taranaki region a consistent growth witnessed over the whole year, however unlike other regions listings are coming onto the market in large numbers up 37% in the final 3 months of the year.

Taranaki Quarterly supply & demand Q4 2012.png

Manawatu / Wanganui

Sales across he Manawatu Wanganui region rose 8% in the final quarter of the year with listings up 13%. The past 3 quarters have seen a faster rise in new listings than sales and this is likely leading to a larger inventory of properties on the market - good news for buyers.

Manawatu Wanganui Quarterly suppy & demand Q4 2012.png

Wairarapa

Sales in the final 3 months of the year surged 38% in the Wairarapa to see a continuation of what has been a very strong year for sales in the region. At the same time the level of new listings whilst not showing the same levels of growth is adding to the available pool of properties on the market.

Wairarapa Quarterly supply & demand Q4 2012.png

Nelson

The property market in the Nelson region is continuing to show no growth. The final quarter of the year saw sales up just 2% whilst new listings fell by 3%, this trend has been seen over the past 3 quarters of 2012.

Nelson Quarterly supply & demand Q4 2012.png

Marlborough

Property sales in Marlborough surged in the final quarter of the year up 50% on the same period in 2011. The year overall has seen strong growth in sales and strong levels of new listings providing a perfect environment for property sales.

Marlborough Quarterly supply & demand Q4 2012.png

West Coast

The property market on the West Coast is suffering significantly over the second half of the year having seen a strong start to 2012. The sales in the final quater were down 5)% with listings down 8%.

West Coast Quarterly supply & demand Q4 2012.png

Central Otago / Queenstown Lakes

In the Queenstown Lakes region including Central Otago the final quarter of 2012 saw a surprising and a significant surge in sales up 39% as compared to prior year - this following some tailing off of sales growth through the earlier part of the year. Listings which had fallen significantly earlier in the year are on the increase but there looks to be a tightness in the market.

Queenstown Lakes Quarterly supply & demand Q4 2012.png

Otago

Sales in Otago surged in the final quater up 19% with new listings up 12% which is identical to the increase in Q3 this would seem to indicate that the market is active and well supplied with property for sale.

Otago Quarterly supply & demand Q4 2012.png

Southland

Sales in Southland grew 12% year on year in the final quarter of 2012 with new listings growing ahead of this by 21%, this follows an 11% growth in new listings matched to a 2% rise in sales in Q3. This would indicate the market is active with demand but buyers have plenty of choice.

Southland Quarterly supply & demand Q4 2012.png

Gap narrows between asking price and sale price in Auckland

by Alistair Helm in


iStock_000018103127XSmall.jpg

It would make logical sense to see a correlation between the asking price for property and the selling price.

One will lead the other. There is likely to be a lag between the trends and equally there is likely to be a difference, naturally asking price will be higher than sale price.

All seems logical and intuitive – that was what I thought, and that was my first reaction when I read the news article this morning regarding the monthly NZ Property Report from Realestate.co.nz. The article quoted Paul McKenzie as saying “there was no significant discrepancy between asking and sale prices. They're normally pretty close. There are months when there are slight differences in ups or downs, but you're talking small percentages."

That type of comment always makes me keen to dive right into the data to see what the facts actually show and what can be interpreted. What I found was interesting – nationally there is a consistent ratio between sales price and asking price, but in Auckland not. Auckland is currently seeing a fairly significant convergence with the gap narrowing to around 5%.

The data

Taking the national data from REINZ of stratified median sales price and the Realestate.co.nz truncated mean asking price for the past 5 years provides a picture of the correlation as shown below for the data for the whole of NZ.

This shows a pretty stable picture over most of the past 3 years whereby the sales price is around a level of 15% below the asking price. There is a slight rise over the past 6 months. (Note the chart shows the 6 months moving average as the solid red line).

Now there is an important point of interpretation here. The asking price used in this analysis is based on all new listing coming onto the market in the respective month. The asking price is either the advertised price or the mid point of a price range if no advertised price is shown as in the case of auctions, tenders and other pricing methods that do not display a price.

Now contrast the chart for NZ with the same chart for Auckland and we see a whole different picture. Overall the correlation between asking price and sales price is smaller and over the past 18 months the trend has been a significant narrowing of the gap to where it is now close to just 5%. It would appear that whereas across the whole country property sells for around 15% less than the asking price, in Auckland it is just 5% less.

Hypothesis

So what could explain this situation? – is it a function of the rising Auckland house prices? Could it be more cautious real estate agents not pricing property too far ahead of expectation in Auckland?

Or could it be a whole different answer, that for example agents around the rest of the country try and be more bullish and advertise property with asking prices at least 15% higher to see what potential there is in the market.

The fact is I don’t know as there is no further data to analyse, however I could be tempted to offer this one hypothesis to see what reaction it provokes.

Auckland has a much higher level of property marketed for auction than any other part of the country – somewhere around 25% of all new listings. Properties listed for sale by auction are not displayed with a price but with a range. Agents who want to attract as many buyers as possible, maybe pitch a property with a range that is below the current market price.

Certainly anecdotal comments in the media constantly seem to focus on buyers becoming frustrated that property they go and see (after checking out property online) ends up selling well above the expectation.

Maybe what we need is for property websites as the primary display medium for real estate to  display a clear price range for all property so as to bring more transparency into the process?


Property market kicks into gear in October

by Alistair Helm in


The property market certainly responded to a long overdue call to restock inventory levels of properties for sale. For the past 18+ months the message has been clear – there is a seller’s market, which has been continually building, and despite the numerous media reports, home owners considering selling seemed to have been overly cautious about responding to this demand from buyers. In October though it seems the response has been heard and the action taken - let's list!

This assessment of the state of the market is provided via the excellent data released each month by Realestate.co.nz in their monthly NZ Property Report. The report is the first data of the month being released in the first few days after month end and provides insight into the supply side of the market – a unique set of data collated as a result of the website hosting close to 100% of all listings by licensed real estate agents.

The data in the report is comprehensive and the charts provide a great insight, as ever though I am keen to explore new methods of presenting the data and as the original author of the NZ Property Report I though I would analyse the data to see how additional representation of the data could help home shoppers better appreciate what is going on. The main perspective I was interested in was how each region of the country was performing as compared to the national trend and each other region. This process lead me to these three charts below which I think ably reflect this desire.

In terms of inventory the national perspective is that inventory levels remain low – they are 16% below the long term average which supports the view that we are experiencing a sellers market. However this is not reflected across all regions. There are 7 regions where inventory is above the long term average making these buyers markets, with Gisborne and Taranaki having considerable inventory based on the current rate of sale. At the other extreme it is very evident to what extent Auckland continues to witness very low inventory and maintain its market situation favouring sellers.

When it comes to new listings the strength across the country is very clear – nationally based on seasonally adjusted data new listings were up 4% in the month with the majority of regions seeing strong rises with only Marlborough being the outlier with a 20% fall in new listings.

In regard to property asking prices the seasonally adjusted asking price for new listings in October rose 4% in October and only 4 regions saw falls in asking price with a very strong surge in Central Otago / Queenstown lakes district as well as Canterbury.

Disclosure of interest in that I used to be CEO of Realestate.co.nz, although I no longer have any affiliation or financial interest in the business – just a passion to see it continue to provide open property data and deliver a great user experience to home shoppers.


Comparing median selling price and median listing price shows a very interesting fact

by Alistair Helm in


Whenever the median price as reported by the Real Estate Institute reaches a new high the ensuing story is always along the lines of “new high, prices buyers out of the market!

However the median price, by its very definition is the mid point of the range of property sales during the period with 50% of all sales below this level and 50% above this level.

Transient

One would logically think that if sales follow a normal distribution then the majority of sales will cluster around the median price. However without access to the raw data from REINZ I am unable to verify this!

So being an inquisitive person I wondered if property listings as a representation of future sales might follow the logic of a clustered normal distribution around the median price for a region or city.

So to be clear the question I was looking to answer was - "are the majority of properties on the market in a specific area or region clustered around the median price?", in the case of Auckland $515,000 or Wellington $400,000 or Christchurch $350,250 (these being the median prices for September).

The short answer is no. This is where things get interesting as shown in the chart below.

The normal distribution for all listings of houses for sale in the major 3 cities is centred around the same price range $300,000 to $400,000.

Now clearly these lines on the chart do not represent normal distribution but they do reflect the distribution of listings by price range.

To carry out this analysis I used the realestate.co.nz website. I was unfortunately unable to access the raw data and therefore was restricted to using the standard price ranges as part of the search functionality. However I still find it fascinating that given the divergence of median selling price of the 3 cities from $350,250 in Christchurch to $515,000 in Auckland the largest selection (in % terms) in each region is to be found in the same price range of $300,000 to $400,000.

Having highlighted this interesting insight into the selection of property on the market I naturally was drawn to the next question "What would the distribution look like for other parts of NZ?"

At random I chose Whangarei (median price $257,750), Timaru (median price $260,000) and New Plymouth (median price $299,000).

The results speak for themselves in the chart below

So what can be deduced from this analysis?

Certainly it shows that there is choice in the market even at prices below the median price. There could be a deduction that Auckland is seeing a stalling of property sales in this bubble of the $300,000 to $400,000 range whilst the majority of sales occur at the higher range. It would be of great benefit to undertake this analysis on a more regular basis.

I do concede that this analysis would be better done with accurate raw data rather than using website search counts. Maybe the team at Realestate.co.nz could be encouraged to analyse their rich database to provide a more complete picture.


Don't confuse low inventory with a lack of listings

by Alistair Helm in ,


Transient

The September report from the Real Estate Institute showed a fall in sales between August and September this year which contrasts with a seasonal rise. Whilst not citing low listings as the cause, the report certainly spoke to the impact that the low level of listings was having on prices.

In the same week the monthly NZ Property Report published by Realestate.co.nz continues to report low levels of inventory. Both of these reports set the scene for what could be a challenging time for the property market heading into what is traditionally the busiest time of year with what many consider very low levels of available stock.

The key questions is -- Is there sufficient stock of houses to buy?

I think it is very important to look behind the headlines and look at the numbers and the source of the numbers to truly answer the question.

Inventory of unsold houses on the market and number of listings of property on the market sound much the same - however they are as different (albeit in a subtle way) as speed is from velocity (for all those that can recall their physics lessons at school!).

The number of listings on the market is very clear - its actual houses, houses you can see and check out.

Inventory on the other hand as reported through the NZ Property Report is a more complex and advanced measure. It is in its own way a vital measure. It is a measure of the available inventory measured by the current rate-of-sale of property. So to say that the current inventory in NZ represents 30.5 weeks, means that based on the rate of sales in the prior 3 months of June, July and August (1,441 sales a week) it would take (theoretically) 30.5 weeks to sell all of the available stock of listings on the market which at the end of September was 44,063 listings. 

To assist in understanding these two measures and better appreciate the true perspective of the market, have a look at this chart which tracks stock of listings and inventory across the country over the past 5 years.

The red line (tracked on the right hand axis) measures the inventory, whilst the grey bars (tracked on the left hand axis) measures actual stock of listings.

A key takeaway here is that at the height of the property crash the inventory of unsold houses on the market back in 2008/9 reached 60 weeks, today it is half that level at 30 weeks. However at that low point in market back in 2008/9 the actual stock of listings was just over 50,000 whereas today it is just over 40,000. That is the point; inventory has halved but there is still a lot of choice in the market with only 20% fewer listings.

Now I know there will be those who will say that the national figures are not relevant and what matters is how many houses there are in this suburb or that suburb. Those comments are both right and wrong. People do buy houses in an area and there are certainly less available property in certain suburbs than there were 3 years ago - but in someways there are always a limited pool of available properties as properties are not homogenous - we are all looking for that unique combination of features in a certain location. So to say that there is an acute shortage is alarmist.

As for those in Auckland or interested in Auckland here is the chart:

In the Auckland region the inventory at the worst of the property crash the inventory peaked at 60 weeks, today it is hovering below 20 weeks, that's a massive decline - however available stock of listings at the peak was around 15,000 whilst today it is around 9,000. Now that is a significantly lower level of available stock, but to call it a shortage?